8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 15, 2007

BROOKE CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)

Kansas	0-25679	48-118574
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

8500 College Boulevard Overland Park, Kansas	66210
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (913) 661-0123

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On November 15, 2007 (the “Closing Date”) Brooke Capital Corporation (“Company”) completed a merger pursuant to an Agreement and Plan of Merger dated August 31, 2007, as amended September 20, 2007, as amended November 15, 2007 (the “Merger Agreement”), by and among Brooke Corporation (“Brooke Corp.”), Brooke Franchise Corporation (“Brooke Franchise”) and the Company. Pursuant to the Merger Agreement, Brooke Franchise was merged with and into the Company.

The description of the merger contained in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is incorporated herein by reference as Exhibit 2.1 to this Current Report on Form 8-K.

As a condition to closing the merger, the Company entered into a Tax Sharing Agreement with Brooke Corp. concerning certain tax matters after the merger and specifying their respective rights and obligations with respect to taxes due for periods before and after the merger.

As a condition to closing the merger, the Company entered into a Trademark Licensing Agreement with Brooke Corp. on the Closing Date granting the Company a worldwide, perpetual, royalty –free license for the trademark “Brooke” for use in conjunction with the Company’s insurance business.

As a condition of closing the merger, the Company also entered into an Amended and Restated Servicing and Tax Allocation Agreement with Brooke Corp. on the Closing Date providing for a monthly fee of zero dollars, the continuation of specified services during the transition period ending December 31, 2007 and for the reimbursement by Brooke Franchise to Brooke Corp. of all out of pocket expenses reasonably incurred by Brooke Corp. in connection with the operations of Brooke Franchise or the support provided by Brooke Corp to Brooke Franchise.

The descriptions of the Tax Sharing Agreement, the Trademark Licensing Agreement, and the Amended and Restated Servicing and Tax Allocation Agreement contained in this Item 1.01 do not purport to be complete and are qualified in their entirety by reference to these agreements, which are filed as Exhibits 99.1, 99.2 and 99.3, respectively, to this Current Report on Form 8-K.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On the Closing Date, the Company completed a merger pursuant to the Merger Agreement in which Brooke Franchise was merged with and into the Company, resulting in the Company being the surviving company. At the Closing Date, Brooke Corp. received merger consideration of 5,000,000 shares of Company common stock, par value $0.01 per share. An additional 2,250,000 shares of Company common stock will be reserved for issuance to Brooke Corp. as merger consideration pursuant to contingent earn-out payments tied to adjusted earnings of the Company (excluding its subsidiaries) in fiscal years 2007 and 2008. The Company has also reserved 2,000,000 additional shares of Company common stock for issuance in connection with stock or options expected to be granted pursuant to the Company’s 2007 Equity Incentive Plan, as amended. Pursuant to the Merger Agreement, Brooke Corp. has agreed it will not transfer the Company common stock that it received in the Merger for a period of 180 days after the Closing Date unless the Company otherwise consents.

Prior to the merger, Brooke Corp. owned 100% of Brooke Franchise and 53% of the Company. As a result of the closing of the merger, Brooke Corp. now owns approximately 81% of the Company. Robert Orr, the Chairman of the Board, President and Chief Executive Officer of the Company immediately prior to the Closing Date, is also the Chairman of the Board of Brooke Corp. He is also a member of a group that controls Brooke Corp. Michael Hess, Vice Chairman of the Board and President of the Company’s subsidiary, Brooke Capital Advisors, Inc., is an original investor in, and a current stockholder of, Brooke Corp. Keith Bouchey, a member of the Board of the Company, became the President and Chief Executive Officer of Brooke Corp. on October 1, 2007.

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The number of shares of Company common stock issued by the Company to Brooke Corp. as merger consideration was the result of negotiations between management of the Company and Brooke Corp. As more fully discussed in the definitive Information Statement filed with the Securities and Exchange Commission on October 16, 2007 and distributed to stockholders regarding a special meeting of stockholders to consider approval of the merger, the Independent Directors Committee of the Board of Directors of the Company actively participated in the negotiation and approval of the Merger Agreement. The execution and delivery of the Merger Agreement by the Company followed a determination by the Independent Directors Committee that the terms of the Merger Agreement were fair to the stockholders of the Company, other than Brooke Corp. In making this determination, the Independent Directors Committee relied in part on a fairness opinion issued to it by a financial advisor and investment banking firm engaged by the Company to act as the Independent Directors Committee’s independent financial advisor with respect to analyzing the fairness, from a financial point of view, of the consideration to be paid by the Company in connection with the merger and in connection with the related agreement to acquire a non-standard automobile insurance company from Brooke Corp, in exchange for additional shares of Company common stock (the “Delta Plus Exchange Agreement”). In its opinion, the financial advisor determined that the consideration to be paid by the Company pursuant to the Merger Agreement was fair to the Company from a financial point of view.

The transactions contemplated by the Delta Plus Exchange Agreement are anticipated to close at a future date subject to satisfaction of conditions contained within the Delta Plus Exchange Agreement.

As described in the section entitled “Information about Business of Brooke Franchise” in the Information Statement, which is incorporated herein by reference, Brooke Franchise’s business prior to the merger consisted primarily of distributing property and casualty insurance through a network of independent agencies franchised under the “Brooke” name.

Item 3.02 Unregistered Sale of Equity Securities.

The information required by this Item is incorporated herein by reference to Item 2.01 above.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As a condition to the closing of the merger, Kyle L. Garst and Dane S. Devlin were appointed directors of the Company effective November 15, 2007. Immediately following the merger, the Board of Directors of the Company appointed Mr. Garst as President and Chief Executive Officer of the Company and Mr. Devlin as Executive Vice President and Chief Operating Officer of the Company. At the same time, William Morton resigned as Chief Financial Officer and Treasurer of the Company effective November 15, 2007. Mr. Morton’s resignation was prompted by desire to attend to the affairs of other companies within the Brooke family of companies. Concurrently, the Board accepted Mr. Morton’s resignation and appointed Leland G. Orr as Chief Financial Officer and Treasurer of the Company effective November 15, 2007.

Mr. Garst, age 37, served as Chairman and Chief Executive Officer of Brooke Franchise from June 2007 until the merger. Previously, Mr. Garst was the Senior Vice President and a director of Brooke Franchise, serving in such capacity since September 2004, with responsibility for managing Brooke Franchise’s franchise sales activities. Mr. Garst joined Brooke Franchise as a sales representative in 1994. From 1997 to 1999, he was a sales representative and profit center leader for Koch Industries in Phoenix, Arizona. In March 1999, Mr. Garst returned as Brooke Franchise’s State Manager for Oklahoma and, in August 2000, he was named its Vice President and Regional Sales Manager for Texas, Oklahoma and Louisiana. In December 2001, Mr. Garst became Brooke Franchise’s Vice President and Investment Sales Manager, as well as its Investor Relations Manager, and served in those capacities until September 2004 when he assumed the position as Chief Executive Officer of Brooke Franchise.

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Mr. Devlin, age 44, served as President and Chief Operating Officer of Brooke Franchise from June 2007 until the merger. Mr. Devlin joined Brooke Franchise in December 1999 as the Missouri State Manager. In August 2000, Mr. Devlin had assumed the position of Kansas City Regional Manager and was promoted to National Operations Manager by October 2001. Mr. Devlin was further promoted to Brooke Franchise’s National Vice President in January 2003 and has served as Senior Vice President since his appointment in September 2005. Prior to the merger, he was a member of the Board of Directors of Brooke Franchise. Prior to joining Brooke Franchise, Mr. Devlin acted as a Marketing Representative with Alliance Insurance Companies from 1998 to November 1999. In addition to his position with Alliance and his first positions with Brooke Franchise, Mr. Devlin also served as an insurance franchise owner from 1996 to 2001.

Leland G. Orr, age 44, currently serves as Director, Chief Financial Officer, Treasurer and Assistant Secretary of Brooke Corp. and has served as a director and officer of Brooke Corp. since its inception in 1986. Mr. Orr has been Brooke Corp’s Chief Financial Officer since 1995, Treasurer since 1986, and Assistant Secretary since 2001. He served as Brooke Corp’s President from 2003 until January 2005 and as Secretary from 1986 until 2001. In addition to his other responsibilities, Mr. Orr manages Brooke Corp’s processing center in Phillipsburg, Kansas. Prior to assuming the role of Chief Financial Officer for Brooke Corp., Mr. Orr served as President of Brooke State Bank, Jewell, Kansas, and as an accountant with Kennedy McKee and Company, LLP (formerly Fox & Company) in Dodge City, Kansas. He is a Certified Public Accountant and a member of each of the American Institute of Certified Public Accountants and the Kansas Society of Certified Public Accountants. Mr. Orr received a Bachelor of Science Degree in Accounting from Fort Hays State University in Hays, Kansas.

Robert D. Orr, who had previously advised the Company that he intended to resign his positions as Chairman of the Board, President and Chief Executive Officer of the Company, has agreed to continue as the Chairman of the Board of the Company. Robert Orr and Leland Orr are brothers.

Item 9.01 Financial Statements and Exhibits

The financial statements of Brooke Franchise and the pro forma financial information related to the merger described in Item 2.01 of this report will be filed by amendment to this current report on Form 8-K no later than 71 calendar days following the date this current report is required to be filed with the Securities and Exchange Commission.

  (a) Exhibits  

2.1 Agreement and Plan of Merger dated August 31, 2007, as amended, by and among Brooke Franchise Corporation, Brooke Capital Corporation and Brooke Corporation (incorporated by reference in Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 7, 2007).

99.1 Tax Sharing Agreement dated as of November 15, 2007 by and between the Company and Brooke Corporation.

99.2 Trademark Licensing Agreement dated as of November 15, 2007 by and between the Company and Brooke Corporation.

99.3 Amended and Restated Servicing and Tax Allocation Agreement dated as of November 15, 2007 by and between the Company and Brooke Corporation.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.  

	Brooke Capital Corporation
	(Registrant)
Date November 19, 2007	By	/s/ Kyle L. Garst
		Kyle L. Garst, President and Chief Executive Officer

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EXHIBIT INDEX

2.1 Agreement and Plan of Merger dated August 31, 2007, as amended, by and among Brooke Franchise Corporation, Brooke Capital Corporation and Brooke Corporation (incorporated by reference in Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 7, 2007).

99.1 Tax Sharing Agreement dated as of November 15, 2007 by and between the Company and Brooke Corporation.

99.2 Trademark Licensing Agreement dated as of November 15, 2007 by and between the Company and Brooke Corporation.

99.3 Amended and Restated Servicing and Tax Allocation Agreement dated as of November 15, 2007 by and between the Company and Brooke Corporation.

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EX-99.1

EXHIBIT 99.1

EXECUTION COPY

TAX SHARING AGREEMENT
BETWEEN
BROOKE CORPORATION
AND
BROOKE CAPITAL CORPORATION

This Tax Sharing Agreement (this “Agreement”) is made and entered into as of November 15, 2007, by and between Brooke Capital Corporation, a Missouri Corporation (“Brooke Capital”), and Brooke Corporation, a Kansas corporation (“Brooke Corporation”).

RECITALS

WHEREAS, Brooke Franchise Corporation, a Kansas corporation (“Brooke Franchise”), is a wholly-owned subsidiary of Brooke Corporation and as of the date hereof, Brooke Franchise was merged with and into Brooke Capital in a transaction (the “Merger”) designed to qualify as a tax-free reorganization pursuant to Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the “Code”);

WHEREAS, Delta Plus Holdings, Inc., a Missouri corporation (“Delta”), is a wholly-owned subsidiary of Brooke Corporation and as of the date hereof, Brooke Corporation contributed all of the common stock of Delta to Brooke Capital in exchange for shares of capital stock of Brooke Capital in a transaction (the “Contribution”) designed to qualify as a tax-free capital contribution pursuant to Section 351 of the Code;

WHEREAS, after the Merger and Contribution, Brooke Capital and its eligible 80% to 100% owned subsidiaries (‘Brooke Capital Subsidiaries”) will be eligible to file federal and state consolidated tax returns with Brooke Corporation, with Brooke Corporation being the common parent of an affiliated group of corporations within the meaning of Section 1504(a) of the Code that includes Brooke Capital (the “Consolidated Group”)

WHEREAS, Brooke Capital will be required at its sole cost and expense to file a separate consolidated federal and state income tax returns for the period ending the date hereof and thereafter be included as part of the Consolidated Group for the purposes of filing federal and state income tax returns;

WHEREAS, in connection with the Merger and Contribution the parties hereto desire to enter into this Agreement, setting forth their agreement with respect to certain Tax matters from and after the Merger Date; and

WHEREAS, the Consolidated Group and Brooke Capital desire on behalf of themselves, their subsidiaries and their successors to set forth their rights and obligations with respect to Taxes due for periods before and after the Merger and Contribution.

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I—DEFINITIONS

1.1	Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to such terms in the Merger Agreement. As used in this Agreement, the following terms have the following respective meanings:
	“Agreement” shall have the meaning set forth in the preamble.
	“Brooke Capital Tax Liability” means Brooke Capital’s Income Tax liability, determined as of the end of the applicable Tax period as 38% (adjusted as necessary to properly reflect the effective federal, state and local income tax rate of the members of the Consolidated Group) of Brooke Capital’s federal taxable income, which federal taxable income shall include the federal taxable income of Brooke Capital Subsidiaries (determined as if Brooke Capital and the Brooke Capital Subsidiaries were not members of the Consolidated Group but including items of income, gain, loss, and deduction that Brooke Capital and the Brooke Capital Subsidiaries will recognize as a result of leaving the Consolidated Group) for each respective Consolidated Period.
	“Business Day” means any day other than a Saturday, a Sunday, or a day which banking institutions located in the State of Kansas are authorized or obligated by law or executive order to close.
	“Carryforward Tax Attribute” means a deductible or creditable consolidated United States Federal Tax attribute, or similar state or local Tax attribute, including (i) a consolidated net operating loss, a consolidated net capital loss, a consolidated unused investment credit, a consolidated unused foreign Tax credit, or a consolidated excess charitable contribution, and (ii) the consolidated minimum Tax credit, credit for producing fuel from a nonconventional source or other consolidated general business credits that can be carried forward from one Tax period to subsequent Tax periods.
	“Code” shall have the meaning set forth in the Recitals.
	“Consolidated Group” shall have the meaning set forth in the Recitals.
	“Consolidated Return” means any consolidated, combined or unitary Tax Return filed by Brooke Corporation for the Consolidated Period with respect to United States federal, state or local Taxes, including Taxes imposed or based on net income, net worth or gross receipts.

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“Consolidated Period” means (a) any Tax period of the Consolidated Group starting with or which includes the date hereof during which Brooke Capital and the Brooke Capital Subsidiaries are members of the Consolidated Group and (b) any Tax period ending after the date hereof in which (i) Brooke Corporation or a Continuing Member and (ii) Brooke Capital and the Brooke Capital Subsidiaries are required to file a consolidated, combined or unitary state or local Tax Return.

“Continuing Member” means any member of the Consolidated Group as if the date hereof other than Brooke Capital and the Brooke Capital Subsidiaries.

“Contribution” shall have the meaning set forth in the Recitals.

“Final Determination” shall mean with respect to any issue (a) a decision, judgment, decree or other order by any court of competent jurisdiction, which decision, judgment, decree or other order has become final and not subject to further appeal; (b) a closing agreement entered into under Section 7121 of the Code or any other binding settlement agreement entered into in connection with or in contemplation of an administrative judicial proceeding; or (c) the completion of the highest level of administrative proceedings if a judicial contest is not, or is no longer, available.

“Income Tax” means any United States federal, state, local or foreign Tax, charge, fee, levy or other assessment which is determined with reference to (a) net income or profits (including capital gains, gross receipts, value added or minimum Tax, but not including sales or use Tax), or (b) multiple bases, including but not limited to, corporate franchise, gross receipts, net worth, privilege, doing business or occupation Taxes, if one of the bases is listed in clause (a).

“Indemnitee” shall have the meaning set forth in Section 2.5.

“Indemnitee Issue” shall have the meaning set forth in Section 2.5.

“Indemnitor” shall have the meaning set forth in Section 2.5.

“Independent Firm” shall have the meaning set forth in Section 6.2.

“Loss” means all liabilities, costs, expenses, (including reasonable expenses of investigation and attorneys’ fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any Tax liability.

“Merger” shall have the meaning set forth in the Recitals.

“Notice” shall have the meaning set forth in Section 7.2.

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“Proceeding” means any audit or other examination, protest, appeals or other administrative or judicial proceeding relating to liability or refunds or adjustments with respect to Taxes for any Tax period.

“Regulations” means the regulations promulgated under the Code, in effect from time to time.

“Separate Return Tax Periods” means Tax periods of Brooke Capital and the Brooke Capital Subsidiaries which is not included in a Consolidated Period.

“Tax” means all taxes, charges, fees, levies, imposts, duties and other assessments, including, without limitations, income, gross receipts, excise, personal property, real property, sales, ad valorem, value-added, withholding, social security, occupation, use, service, service use, leasing, leasing use, license, payroll, franchise, transfer and recording taxes, fees and charges, imposed by the United States or any state, local, or foreign governmental authority whether computed on a separate, consolidated, unitary, combined or another basis; and such term shall include (including without limitation any duty to reimburse another party for indemnified Taxes or refunds or credit of Taxes) any interest, fines, penalties and additional amounts attributable to, imposed on, or with respect to, any such taxes, charges, fees, levies, imposts, duties or other assessments, and interest thereon.

“Tax Authority” means with respect to any Tax, the jurisdiction (or political subdivision thereof) or governmental entity that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such jurisdiction or governmental entity.

“Tax Benefit” shall have the meaning set forth in Section 2.5(d).

“Tax Item” means any item of income, gain, loss, deduction, credit, provisions for reserves, recapture of credits or any other item which is taken into account in determining taxable income or is otherwise taken into account in determining Taxes paid or payable, including an adjustment under Section 481 of the Code resulting from a change in accounting method.

“Tax Return” shall mean any return, information return, form, report, filing, statement, declaration or other document required to be filed with a Tax Authority in respect of any Tax or Taxes.

ARTICLE II—TAX RETURNS, TAX PAYMENTS AND EVENT OF LOSS

2.1 Filing of Tax Returns.

(a) Each of the parties to this Agreement agrees to report the Merger as a “reorganization” under Section 368(a)(1)(A) of the Code and the Contribution as a “tax-free contribution of capital” under Section 351 of the Code on all Tax Returns and other filings, to take no position inconsistent therewith or with the consummation of such transaction as set forth in the Merger Agreement (in the absence of a controlling change in law or circumstance) and to file or cause to be filed all such Tax Returns on a timely basis (including extensions).

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(b) Consolidated Returns.

(i)	From and after the date hereof, Brooke Corporation shall prepare and file, or cause to be prepared and filed, all Consolidated Returns (including any Consolidated Returns that include the date hereof), and Brooke Capital, on behalf of itself and on behalf of the Brooke Capital Subsidiaries hereby irrevocably designates Brooke Corporation as its agent to take any and all actions necessary or incidental to the preparation and filing of such Consolidated Returns.
(ii)	All Consolidated Returns described in Section 2.1(b) hereof filed after the date of this Agreement, in the absence of a controlling change in law or circumstances, shall be prepared on a basis consistent with the elections, accounting methods, conventions and principles of taxation used for the most recent taxable periods for which Tax Returns involving similar Tax Items have been filed and in a manner that does not unreasonably accelerate income or defer deductions to the extent that a failure to do so would result in an increase in Tax payable, or a reduction in Tax attributes of, Brooke Capital and the Brooke Capital Subsidiaries.
(iii)	Except as limited by Section 2.l(b)(ii), Brooke Corporation shall have the exclusive right, in its sole discretion, with respect to any Tax Return described in this Section 2.1(b) to determine (1) the manner in which such Tax Return shall be prepared and filed, including the elections, methods of accounting, positions, conventions and principles of taxation to be used and the manner in which any Tax Item shall be reported; (2) whether any extensions may be requested; (3) the elections that will be made by Brooke Corporation, any Continuing Member, and Brooke Capital on such Tax Return; (4) whether any amended Tax Returns shall be filed; (5) whether any claims for refund shall be made; (6) whether any refunds shall be paid by way of refund or credited against liability for the related Tax; and (7) whether to retain outside firms to prepare or review such Tax Return.
(iv)	For each Consolidated Period, Brooke Capital shall cooperate in good faith with Brooke Corporation to determine the appropriate amount of its Tax Items attributable to the Consolidated Group and will provide Brooke Corporation with documents and other information including work papers and schedules, state apportionment schedules, fixed asset ledgers, detailed general ledgers, Schedule M analysis and journal entries, in order for Brooke Corporation to prepare Consolidated Returns for each jurisdiction in which Brooke Capital is included in a Consolidated Return with any Continuing Member, in each case, on or before the date which is thirty (30) Business Days prior to the due date of such Tax Return. Tax Items to be included in any Consolidated Returns for the Consolidated Period that includes the date hereof shall be determined by the method described in Section 2.1(b) (v).

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(v) Notwithstanding anything in this Agreement to the contrary, the Brooke Capital Tax Liability for the Consolidated Period that includes the date hereof shall be determined pursuant to Section 1.1502-76 of the Regulations by including only that portion of the Tax year starting on the date hereof, based on a closing of the books for Income Tax purposes and, immediately after the date hereof, Tax Items will be taken into account (to the extent not previously taken into account in the computation of the Brooke Capital Tax Liability) as required by the applicable intercompany transaction Regulations.

(c) Separate Returns.

(i)	Brooke Capital shall prepare and timely file Tax Returns and pay Brooke Capital separate Tax liabilities, or estimated separate Tax liabilities, with respect to any Tax Authority under which Brooke Capital is required to file (or does file) a separate federal, state, local or foreign Tax Return directly with the Tax Authority, and not as a part of a Consolidated Group Tax Return for a period that includes a Consolidated Period. Brooke Capital shall prepare its separate Tax Returns consistent with the elections, methods of accounting, positions, conventions, and principles of taxation used by Brooke Corporation to file the Consolidated Returns.
(ii)	Brooke Corporation and the Continuing Members, on the one hand, and Brooke Capital, on the other hand, shall each prepare and timely file Tax Returns with, and pay their own Tax liabilities directly to, the appropriate Tax Authorities for all Separate Return Tax Periods.
(iii)	If there are any adjustments to the Tax liabilities of Brooke Capital for Separate Return Tax Periods or for separate federal, state or local Tax Returns for a Consolidated Period, Brooke Capital will control the conduct of Proceedings related thereto, and will pay the Tax liability, if any, directly to the relevant Tax Authority.

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2.2 Payment of Taxes.

(a)	Subject to Brooke Corporation’s rights for recovery for Taxes from Brooke Capital under this Agreement, Brooke Corporation shall pay (or cause to be paid) to the appropriate Tax Authorities all Taxes with respect to the Consolidated Group’s Consolidated Returns for the Consolidated Period.
(b)	Brooke Capital shall pay (or cause to be paid) to the appropriate Tax Authorities all Taxes with respect to any separate federal, state, local, or foreign Tax Return filed or required to be filed by Brooke Capital and the Brooke Capital Subsidiaries.

2.3 Allocation of Taxes of the Consolidated Returns.

(a)	For each Consolidated Period, Brooke Capital shall be liable for and shall pay to Brooke Corporation in accordance with Section 2.5 the Brooke Capital Tax Liability in accordance with the manner in which the Consolidated Returns are filed.
(b)	For each Consolidated Period, Brooke Capital shall be liable for, and shall pay to Brooke Corporation in accordance with Section 2.5, any increase in the Brooke Capital Tax Liability resulting from an adjustment provided for in Section 2.4, and Brooke Corporation shall pay to Brooke Capital any reduction in the Brooke Capital Tax Liability resulting from an adjustment provided for in Section 2.4.

2.4

Recomputation and Adjustment of Taxes; Amended Returns. For any Consolidated Period, in the event of a redetermination of any Tax Item of any Continuing Member or Brooke Capital as a result of a Final Determination, the filing of a Tax refund claim or the filing of an amended Tax Return pursuant to which Taxes are paid to a Tax Authority or a refund of Taxes is received from a Tax Authority, Brooke Corporation and Brooke Capital shall prepare jointly, in accordance with the principles and procedures set forth in this Agreement, revised Tax Returns, as appropriate, to reflect the redetermination of such Tax Item as a result of such Final Determination, filing of a Tax refund claim or filing of an amended Tax Return. Following the preparation of such revised Tax Returns, Brooke Capital’s payment obligations under Section 2.3 hereof shall be redetermined.

2.5

Indemnification/Payment.

(a) Brooke Corporation and each Continuing Member shall jointly and severally indemnify Brooke Capital, the Brooke Capital Subsidiaries and their respective directors, officers and employees, and hold them harmless from and against any Tax or Loss that is attributable to, or results from, the failure of Brooke Corporation to make any payment required to be made by Brooke Corporation under this Agreement or a breach by Brooke Corporation of any provision of this Agreement. Brooke Capital and the Brooke Capital Subsidiaries shall jointly and severally indemnify Brooke Corporation and each Continuing Member and their respective directors, officers and employees, and hold them harmless from and against any Tax or Loss that is attributable to, or results from, the failure of Brooke Capital to make any payment required to be made under this Agreement or a breach by Brooke Capital of any provision of this Agreement.

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(b)	Brooke Corporation and each Continuing Member shall jointly and severally indemnify Brooke Capital, the Brooke Capital Subsidiaries and their respective directors, officers and employees and hold them harmless from and against any Tax or Loss attributable to the negligence of Brooke Corporation or any Continuing Member in supplying Brooke Capital with inaccurate or incomplete information, in connection with the preparation of any Tax Return or the conduct of any Proceeding. Brooke Capital shall jointly and severally indemnify Brooke Corporation, each Continuing Member and their respective directors, officers and employees and hold Brooke Capital and the Brooke Capital Subsidiaries in supplying Brooke Corporation or any Continuing Member with inaccurate or incomplete information, in connection with the preparation of any Tax Return or the conduct of any Proceeding.
(c)	If an indemnification obligation of any Continuing Member (including Brooke Corporation) or Brooke Capital with respect to a Consolidated Period arises in respect of an adjustment that makes allowable to a Continuing Member or Brooke Capital any credit deduction, amortization, exclusion from income or other allowance (a “Tax Benefit”) that would not, but for such adjustment, be allowable, then any payment by any Continuing Member to Brooke Capital pursuant to this Section 2.5 shall be an amount equal to the amount otherwise due but for this subsection (e), minus the present value of the product of (x) the Tax Benefit multiplied (y) (i) 100 percent for any portion of a Tax Benefit that is treated as a credit or else (ii) by the maximum corporate Tax rate of the Tax Authority as to which the Tax Benefit relates and as of the period in which the Tax Benefit is first allowable. The present value of such product shall be determined by discounting such product from the time the Tax Benefit becomes allowable at a per annum rate equal to the long-term applicable federal rate in effect on the last day of such period plus 200 basis points.
(d)	Any payment required as a result of Section 2.3(c) shall be paid on the applicable quarterly date in which the payment of Taxes are due, and any payment required under Section 2.3(a) or (b) shall be paid ten (10) days after the determination of the Brooke Capital Tax Liability for the applicable Consolidated Period.
(e)	Any indemnity payment required to be made pursuant to this Section 2.5 shall be paid thirty (30) days after the indemnified party makes written demand upon the indemnifying party, but in no case shall an indemnity payment with respect to Taxes be paid earlier than five (5) business days prior to the date on which the relevant Taxes are required to be paid (or would be required to be paid if no such Taxes are due) to the relevant Taxing Authority (including estimated Tax payments).

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(f) Whenever a party hereto (an “Indemnitee”) becomes aware of the existence of an issue raised by any Taxing Authority which could reasonably be expected to result in a determination that would increase the liability for any Tax of the other party hereto or require a payment hereunder to the other party (an “Indemnitee Issue”), the Indemnitee shall in good faith promptly give notice to such other party (the “Indemnitor”) of such Indemnity Issue. The failure of any Indemnitee to give such notice shall not relieve any Indemnitor of its obligations under this Agreement except to the extent such Indemnitor or its affiliates is actually materially prejudiced by such failure to give notice.

2.6

Refunds. Brooke Corporation shall be entitled to receive and retain all refunds of Taxes with respect to Tax Returns for which Brooke Corporation has filing responsibility, including under this Agreement. Brooke Capital shall be entitled to receive and retain all refunds of Taxes with respect to Tax Returns for which Brooke Capital has filing responsibility, including under this Agreement.

2.7

Interest. Payments pursuant to this Agreement that are not made within the period prescribed in this Agreement or, if no period is prescribed, within fifteen (15) Business Days after demand for payment is made shall bear interest for the period from and including the date immediately following the fifteenth (15th) Business Day after demand for payment is made through the date of payment at a per annum rate equal to the long-term applicable federal rate in effect on the last day of such period plus 200 basis points. Such interest will be payable at the same time as the payment to which it relates and shall be calculated on the basis of a year of 365 days and the actual number of days for which due.

ARTICLE III—CARRYBACK/CARRYFORWARD TAX ATTRIBUTES

3.1

Carryover and Carryback of Tax Attributes to Separate Return Tax Period. Unless the final or temporary Regulations require an allocation of particular items of Consolidated Group’s Carryover and Carryback Tax Attributes from the Consolidated Periods to Brooke Capital’s Separate Return Tax Periods, no Carryover and Carryback Tax Attributes will be allocated to Brooke Capital. Brooke Corporation will allocate to Brooke Capital only that portion, if any, of particular Carryover and Carryback Tax Attribute items as the final or temporary Regulations require to be so allocated.

3.2

Calculation of Carryover and Carryback Tax Attributes. Calculation of the portion of any Carryover and Carryback Attributes available to Brooke Capital shall be made by Brooke Corporation in accordance with this Article III. Such calculation will be provided to Brooke Capital as soon as practicable but in any case estimates shall be provided to Brooke Capital not later than a date that permits Brooke Capital sufficient time to prepare and to timely file Tax Returns for Brooke Capital’s Separate Return Tax periods, taking all extensions of time to file Tax Returns into consideration. Brooke Corporation shall also advise Brooke Capital of any adjustments to such calculations as a result of a Tax audit, a Final Determination, or otherwise. Brooke Capital shall have a right to review Brooke Corporation’s calculations made pursuant to this Section 3.2.

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3.3 Tax Attributes to be Claimed for Separate Return Tax Periods. Brooke Capital shall prepare and file all of its Tax Returns for all Separate Return Tax Periods taking into account the amount of the Carryover and Carryback Tax Attributes provided to Brooke Capital by Brooke Corporation pursuant to this Article III.

ARTICLE IV—TAX AUDITS

4.1

General. Brooke Corporation shall have the sole right to represent the interests of the Consolidated Group, including Brooke Capital, in any Proceeding in connection with any Tax liability for a Consolidated Period for which a member of the Consolidated Group may be liable. Brooke Corporation’s rights shall extend to any matter pertaining to the management and control of a Proceeding, including, without limitation, execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item. Notwithstanding the foregoing, if such Proceeding relates to Taxes as to which Brooke Capital is solely liable for the payment of such Taxes under this Agreement or otherwise and would not result in any additional Tax liability or detriment to the Consolidated Group, Brooke Capital shall have the right to represent the interests of Brooke Capital in such Proceeding so long as (i) Brooke Capital shall have agreed in writing to pay all costs and expenses that it shall incur in connection with the Proceeding including all attorneys’, accountants’ and investigatory fees and disbursements and (ii) Brooke Capital shall have acknowledged in writing its obligation to pay the Taxes and/or indemnify the Consolidated Group against all costs and expenses with respect to such Proceeding; provided, however, if such Proceeding would result in the extension of the statute of limitations with respect to any Tax Return for which any member of the Consolidated Group may be liable, Brooke Corporation may, in its sole discretion, on at least ten (10) Business Days notice to Brooke Capital, require Brooke Capital to pay the Tax proposed and sue for a refund or to take any other action Brooke Corporation may reasonably request to prevent such an extension.

4.2

Notice of Proceeding. Brooke Corporation will notify Brooke Capital in writing of any pending or threatened Proceeding in connection with any Tax liability for which Brooke Capital may be liable, promptly upon receipt of notice of such Proceeding by any Continuing Member. Brooke Capital will notify Brooke Corporation in writing of any pending or threatened Proceeding in connection with any Tax liability for which any member of the Consolidated Group may be liable, promptly upon receipt of notice of such Proceeding by Brooke Capital. Notification must include a complete copy of any written communication, and a complete written summary of any oral communication. The failure of Brooke Corporation or Brooke Capital to timely forward such notification shall not relieve the other party of its obligation to pay such Tax, except to the extent that the failure to timely forward notification prejudices the ability of the other party to contest the Tax liability.

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ARTICLE V—COOPERATION, RECORD RETENTION, ACCESS, CONFIDENTIALITY

5.1

Cooperation. Brooke Corporation and Brooke Capital will provide each other with the cooperation and information reasonably requested by the other party in connection with Tax planning, the preparation or filing of any Tax Return (or claim for refund), the determination and payment of any Tax (or estimated Tax), or the conduct of any Proceeding; provided, however, that neither party is required to disclose privileged and confidential information. Such cooperation and information includes: (i) promptly forwarding copies of appropriate notices and other communications (including information document requests, revenue agent’s reports and similar reports, notices of proposed adjustments and notices of deficiency) received from or sent to any Tax Authority, (ii) providing copies of all relevant Tax Returns (including workpapers and Schedules), and documents relating to rulings or other determinations by Tax Authorities, (iii) providing copies of records concerning the ownership and Tax basis of property, (iv) providing other relevant information which either party may possess, including explanations of documents and information provided under this Agreement, as well as access to appropriate personnel, (v) the execution if any document that may be necessary or reasonably helpful in connection with the filing of a Tax Return (or claim for refund) or in connection with any Proceeding, including waivers, consents or powers of attorney, and (vi) the use of the parties’ reasonable efforts to obtain any documentation from a governmental authority or a third party that may be necessary or reasonably helpful in connection with any of the foregoing.

5.2

Record Retention; Access. Brooke Corporation and Brooke Capital shall each (i) until sixty (60) days after the expiration of six years or the relevant statute of limitations (including any extensions of which it has actual notice) retain records, documents, accounting data and other information (including computer data) necessary for the preparation and filing of all Tax Returns for all Consolidated Periods in respect of Taxes of Brooke Corporation and members of the Consolidated Group or Brooke Capital or for the audit of such Tax Returns; and (ii) give to the other party reasonable access to such records, documents, accounting data and other information (including computer data) and to its personnel (insuring their cooperation) and premises, for the purpose of the review or audit of such Tax Returns to the extent relevant to an obligation or liability of a party under this Agreement. Prior to destroying any records, documents, data or other information in accordance with this Section 5.2, the party wishing to destroy such items will give the other party a reasonable opportunity to obtain such items (at such other party’s expense).

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5.3 Confidential Information. Brooke Corporation and each Continuing Member and Brooke Capital, on behalf of itself and the Brooke Capital Subsidiaries, shall hold and cause its employees, consultants, advisors and any other agents to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information (other than any such information relating solely to the business or affairs of such party) concerning the other party furnished to it by the other party or its representatives pursuant to this Agreement (except to the extent that such information was (i) in the public domain through no fault of the party to which it was furnished, or (ii) lawfully acquired from other sources by such party), and shall not release or disclose such information to any other person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors who shall be advised of the provisions of this Section 5.3. Any disclosure of information by either party to accountants for review purposes pursuant to sections of the Agreement providing for review rights shall not constitute a breach of confidentiality under this Agreement.

ARTICLE VI—DISPUTE RESOLUTION

6.1

Intent of Parties. Except as otherwise provided in this Agreement, it is the intent of the parties that Brooke Capital’s federal, state, local and foreign Tax Liability for all Tax periods, beginning with the Tax period that includes the Merger Date, will be determined as if Brooke Capital was a corporation separate from the Consolidated Group. This Agreement shall at all times be interpreted consistently with such intent.

6.2

Dispute Resolution. In the event that Brooke Corporation and Brooke Capital disagree as to the amount or calculation of any payment to be made under this Agreement, or the interpretation or application of any provision under this Agreement the parties shall attempt in good faith to resolve such dispute. If such dispute is not resolved within sixty (60) Business Days following the commencement of the dispute, Brooke Corporation and Brooke Capital shall jointly retain a nationally recognized law firm or “Big Four” accounting firm, which firm is independent of both parties (the “Independent Firm”), to resolve the dispute. The Independent Firm shall act as an arbitrator to resolve all points of disagreement and its decision shall be final and binding upon all parties involved. Following the decision of the Independent Firm, Brooke Corporation and Brooke Capital shall each take or cause to be taken any action necessary to implement the decision of the Independent Firm. The fees and expenses relating to the Independent Firm shall be borne equally by Brooke Corporation and Brooke Capital.

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ARTICLE VII—MISCELLANEOUS PROVISIONS

7.1

Termination. Notwithstanding any other provision in this Agreement, any liabilities determined under this Agreement shall not terminate any earlier than sixty (60) days after the expiration of the applicable statute of limitations for such liability. All other representations, warranties and covenants under this Agreement shall survive indefinitely.

7.2

Notices. Every notice, request, settlement, or bill or other communication provided for in this Agreement (a “Notice”) must be in writing and may be personally served, provided a receipt is obtained, or may be sent by certified mail, return receipt requested, postage prepaid, or may be sent by facsimile, with acknowledgment of receipt requested, to the parties at the following addresses (or such other address as one party may specify by Notice to the other parties).

If to Brooke Corporation:

Brooke Corporation
8500 College Boulevard
Overland Park, Kansas 66210
Attention: Keith E. Bouchey, President and CEO
Telecopy No.: (913) 345-9586

If to Brooke Capital:

Brooke Capital Corporation
10950 Grandview Drive, Suite 600
Overland Park, Kansas 66210
Attention: Chief Executive Officer
Telecopy No.: (913) 451-3183

	A Notice which is delivered personally is given as of the date specified in the written receipt. A Notice sent by certified mail is given on the third (3rd) Business Day following the date of mailing. A Notice by facsimile is given on the date it is transmitted, provided that acknowledgment of receipt is received by sender.
7.3	Governing Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Kansas, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Kansas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Kansas.
7.4	Change in Law. If, due to any change in applicable law or regulation or the interpretation thereof by any court of law or other governing body having jurisdiction, subsequent to the date of the Agreement, performance of any provision of or any transaction contemplated by this Agreement shall become impracticable or impossible, the parties will use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by this Agreement.

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7.5	Treatment of Payments. The parties hereto shall treat any payments made pursuant to the terms of this Agreement as a capital transaction occurring prior to the Merger Date for all Tax purposes, except to the extent such payments represent interest paid pursuant to Section 2.7.
7.6	Binding Effect; No Assignment; Third Party Beneficiaries. This Agreement shall be binding on, and shall inure to the benefit of, the parties and their respective successors and assigns. Brooke Corporation and Brooke Capital hereby guarantee the performance of all actions, agreements and obligations provided for under this Agreement of Brooke Corporation, each Continuing Member and Brooke Capital, respectively. Brooke Corporation and Brooke Capital shall not assign any of their rights or delegate any of their duties under this Agreement without the prior written consent of the other party. No person (including, without limitation, any employee of a party or any stockholder of a party) shall be, or shall be deemed to be, a third party beneficiary of this Agreement.
7.7	Entire Agreement; Amendments. This Agreement constitutes the entire agreement of the parties concerning the subject matter hereof and supersedes all prior agreements, whether or not written, concerning such subject matter. The provisions of this Agreement may not be amended and parties hereto may not take any action herein prohibited, or fail to perform any act herein required to be performed by it, unless such party has obtained the prior written consent of the other party. No other course of dealing among the parties hereto or any delay in exercising any rights hereunder shall operate as a waiver of any rights hereunder. The parties recognize and acknowledge their intention to enter into additional agreements from time to time with respect to the allocation of Taxes not covered by this Agreement.
7.8	Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which shall constitute together the same document.
7.9	Interpretation; Descriptive Headings. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words describing the singular number shall include the plural and vice versa. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.
7.10	Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon the parties and their respective successors, predecessors and assigns, but no assignment of this Agreement shall relieve any party of its obligations without the written consent of the other party.

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7.11	Term. This Agreement shall commence on the date of execution indicated above and shall continue in effect until otherwise agreed to in writing by Brooke Corporation and Brooke Capital, or their successors.
7.12	Severability. If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
7.13	Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the party or parties who arc or are to be thereby aggrieved shall have the right of specific performance and injunctive relief giving effect to its or their rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

BROOKE CAPITAL CORPORATION

/s/ MICHAEL S. HESS

By: Michael S. Hess
Title: Vice Chairman

BROOKE CORPORATION

/s/ KEITH E. BOUCHEY

By: Keith E. Bouchey
Title: CEO and President

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EX-99.2

EXHIBIT 99.2

EXECUTION COPY

TRADEMARK LICENSE AGREEMENT

This TRADEMARK LICENSE AGREEMENT (the “Agreement”) is made this 15^th day of November, 2007, by and among BROOKE CORPORATION, a Kansas corporation (“Licensor”), and BROOKE CAPITAL CORPORATION, a Kansas corporation (“Licensee”).

RECITALS

A. Licensor is the owner of certain rights and goodwill associated therewith for the trademarks, service marks, and trade names identified on Schedule A (each, a “Mark” and collectively, the “Marks”) and the exclusive right to use and license the use thereof;

B. As of August 31, 2007, Licensor and Licensee are parties to that certain Agreement and Plan of Merger pursuant to which Brooke Franchise Corporation will be merged (the “Merger”) into and with Licensee (the “Merger Agreement”);

C. Pursuant to the Merger Agreement, Licensor has agreed to license to Licensee, under the terms and conditions of this Agreement, the Marks; and

D. The Merger was effected on and as of the date first above written.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the respective covenants, agreements, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:

1. LICENSE

1.1.

Licensor hereby grants to Licensee a non-exclusive, worldwide, fully paid-up, royalty-free, non-transferable, sub-licensable (as specifically set forth in Section 1.2, below) right and license to use the Marks solely in connection with Licensee’s insurance business.

1.2.

Licensee may sub-license its right to use the Marks to any franchisees and subsidiaries of Licensee (each, a “Sub-Licensee”) provided that (a) such entity remains a franchisee or subsidiary of Licensee at the time of and during the limited term of any such sub-license; and (b) such entity agrees in writing, in a form to be approved by Licensor, to limitations, restrictions, and obligations no less protective of Licensor than as set forth in this Agreement. Except as set forth herein, Licensee may not sub-license without Licensor’s prior written consent. Nothing herein shall be interpreted to give any Sub-Licensee the right to further sub-license the Marks without prior written consent of Licensor.

1.3. Notwithstanding anything herein, Licensee shall remain liable for the actions of any Sub-Licensee to whom Licensor sub-licenses its rights hereunder. For any Sub-Licensee, Licensee agrees to assist and cooperate with Licensor in Licensor’s enforcement and protection of the use of the Marks so as to conform to the quality standards set forth in Section 4, below.

2. TERM

This Agreement and the license granted hereunder shall commence on the date hereof (the “Effective Date”) and shall continue until terminated in accordance with the provisions of this Agreement.

3. TRADEMARKS

3.1.	Licensee hereby acknowledges Licensor’s right, title and interest in and to the Mark and Licensor’s exclusive right to use and license the use of the Marks and agrees not to claim any title to the Marks or any right to use the Marks except as permitted by this Agreement.
3.2.	Licensee shall at no time adopt or use, without Licensor’s prior written consent, any variation of the Marks, including translations, or any mark likely to be similar to or confusing with the Marks. In the event that Licensor consents to any variation of the Marks, Licensee hereby agrees that Licensor shall own such new mark and shall, at its cost and expense, file and obtain in Licensor’s name all United States and international trademark registrations. Licensor agrees to give Licensee reasonable assistance, including execution and delivery of all documents required by Licensee, in filing such applications for trademark registration.
3.3.	Licensee shall, during the term of this Agreement and after termination hereof, execute such documents as Licensor may request from time to time to ensure that all right, title and interest in and to the Marks reside with Licensor.
3.4.	The provisions of this Section 3 shall survive any termination of this Agreement.

4. QUALITY STANDARDS

Licensee shall furnish to Licensor, upon Licensor’s reasonable request, copies of all material on which the Mark(s) appears (the “Materials”). Licensee shall maintain the use of the Marks so as to conform to (a) the written standards of quality as set by Licensor from time to time and provided to Licensee; and (b) the usage guidelines for the Mark(s) as set forth in Schedule A or as designated by Licensor from time to time and provided to Licensee.

5. INFRINGEMENT

5.1. Licensee shall notify Licensor promptly of any infringement or unauthorized use of the Mark(s) by others of which Licensee becomes aware. Licensor shall have the sole right, at its expense, to bring any action on account of any such infringement or unauthorized use, and Licensee shall cooperate with Licensor, as Licensor may request, in connection with any such action brought by Licensor. Licensor shall retain any and all damages, settlement and/or compensation paid in connection with any such action brought by Licensor. If Licensor does not undertake such action within ninety (90) calendar days after notice from Licensee of such alleged infringement, Licensee may prosecute the same, at its expense, provided that no settlement shall be made without the prior written approval of Licensor. In the event that any damages, settlement and/or compensation are paid in connection with any such action, Licensee shall first retain an amount in reimbursement of its expenses; any remaining amount shall be divided equally between Licensor and Licensee.

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5.2.

Licensor shall have the sole right, at its expense, to defend and settle for other than money damages any action that may be commenced against Licensor or Licensee alleging that the Mark(s) infringes any rights of third parties. Licensee shall, at the direction of Licensor, promptly discontinue its use of the Mark(s) alleged to infringe rights of such third parties. If Licensor does not give notice to Licensee of its intent to defend or settle such action within ninety (90) calendar days after notice from Licensee of such alleged infringement, Licensee may defend the same, at its expense, provided that no settlement shall be made without the prior written approval of Licensor and Licensee shall advise Licensor periodically of the status of the action and promptly of any material developments. Licensor reserves the right to participate at any time in such proceedings.

5.3.

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, LICENSOR SHALL HAVE NO LIABILITY TO LICENSEE FOR OR IN RESPECT OF ANY CLAIM BY ANY THIRD PARTY THAT LICENSEE’S USE OF THE MARK(S) PURSUANT TO THIS AGREEMENT INFRINGES UPON OR OTHERWISE VIOLATES ANY PROPRIETARY OR OTHER RIGHTS OF SUCH THIRD PARTY OTHER THAN A CLAIM THAT LICENSEE’S USE OF THE MARK(S) PURSUANT TO THIS AGREEMENT VIOLATES THE CONTRACTUAL RIGHTS OF ANY OTHER LICENSEE OF LICENSOR.

6.	TERMINATION
	Either party shall have the right to terminate this Agreement upon the following:

(a)

if either Licensor or Licensee defaults in the performance or observance of any of the terms or conditions of this Agreement and such default is not remedied within thirty (30) calendar days after written notice specifying the nature of the default is received by the defaulting party, then the nondefaulting party shall have the right to terminate this Agreement by written notice to the defaulting party; or

(b)

if any of the following events occur: (1) insolvency or the making by a party to this Agreement of an assignment for the benefit of creditors; (2) the filing by or against a party hereto of, or the entry of an order for relief against a party hereto in, any voluntary or good faith involuntary proceeding under any bankruptcy, insolvency, reorganization or receivership law, including, but not limited to, the Bankruptcy Code, or an admission seeking relief as therein allowed, which filing or order shall not have been vacated within sixty (60) calendar days from the entry thereof; (3) the appointment of a receiver for all or a substantial portion of such party’s property and such appointment shall not be discharged or vacated within sixty (60) calendar days of the date thereof; or (4) the assumption of custody, attachment or sequestration by a court of competent jurisdiction of all or a significant portion of such party’s property, then the other party to the Agreement shall have the right to terminate this Agreement by written notice to the party affected by such occurrence. No assignee for the benefit of creditors, receiver, liquidator, trustee in bankruptcy, sheriff or any other officer of the court or official charged with taking over custody of the assets or business of a party to this Agreement shall have any right to continue performance of this Agreement, and this Agreement may not be assigned by operation of law.

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7. EFFECTS OF AND PROCEDURE ON TERMINATION

Unless otherwise agreed to in writing between the parties, upon the termination of this Agreement all rights of Licensee granted hereunder shall terminate and automatically revert to Licensor and Licensee and Sub-Licensees, if any, shall immediately discontinue the use of the Marks and thereafter shall no longer use or have the right to use the Marks or any variation or simulation thereof, or any word or mark similar thereto. Licensee acknowledges that Licensee’s or any Sub-Licensees’ failure to cease the use of the Marks upon termination of this Agreement shall result in immediate and irreparable damage to Licensor and to the rights of any subsequent licensee. Licensee acknowledges and admits that there is not adequate remedy at law for such failure, and agrees that in the event of such failure, Licensor shall be entitled to equitable relief by way of temporary and permanent injunction and such other and further relief as any court with jurisdiction may deem just and proper.

8. ENTIRE AGREEMENT

This Agreement, together with the Schedule hereto, sets forth the entire agreement between the parties with regard to the subject matter hereof, and supersedes all other prior agreements and understandings, written or oral, between the parties with respect to such subject matter.

9. GOVERNING LAW

This Agreement shall be construed and interpreted according to the internal laws of the State of Kansas, excluding any choice of law rules that may direct the application of the laws of another jurisdiction. The parties hereby stipulate that any action or other legal proceeding arising under or in connection with this Agreement may be commenced and prosecuted in its entirety in the federal or state courts having jurisdiction over Johnson County, Kansas, each party hereby submitting to the personal jurisdiction thereof, and the parties agree not to raise the objection that such courts are not a convenient forum. Process and pleadings mailed to a party at the address provided in Section 15 shall be deemed properly served and accepted for all purposes.

10. WAIVER AND AMENDMENT

This Agreement may be amended, supplemented, modified and/or rescinded only through an express written instrument signed by all parties or their respective successors and permitted assigns. Any party may specifically and expressly waive in writing any portion of this Agreement or any breach hereof, but only to the extent such provision is for the benefit of the waiving party, and no such waiver shall constitute a further or continuing waiver of any preceding or succeeding breach of the same or any other provision. The consent by one party to any act for which such consent was required shall not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or similar acts in the future, and no forbearance by a party to seek a remedy for noncompliance or breach by another party shall be construed as a waiver of any right or remedy with respect to such noncompliance or breach.

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11. ASSIGNMENT

Except as specifically set forth herein, neither this Agreement nor all or any portion of the rights licensed to Licensee herein shall be assigned by either party (voluntarily, involuntarily, by judicial process, operation of law or otherwise) without the prior written consent of the other party.

12. SUCCESSORS

Each of the terms, provisions and obligations of this Agreement shall be binding upon, shall inure to the benefit of, and shall be enforceable by the parties and their respective legal representatives, successors and permitted assigns.

13. NO THIRD PARTY BENEFICIARIES

Nothing in this Agreement will be construed as giving any person, other than the parties to this Agreement and their successors and permitted assigns, any right, remedy or claim under, or in respect of, this Agreement or any provision hereof.

14. NO PERSONAL LIABILITY.

This Agreement shall not create or be deemed to create or permit any personal liability or obligation on the part of (a) any direct or indirect stockholder of Licensor or Licensee, or (b) any officer, director, employee, agent or representative of Licensor or Licensee.

15. NOTICES

All notices, requests, demands and other communications made under this Agreement shall be in writing, correctly addressed to the recipient as follows:

If to Licensee: Brooke Capital Corporation
10950 Grandview Drive, Suite 600
Overland Park, Kansas 66210
Attention: Mr. Kyle L. Garst, CEO and President
Facsimile: (913) 661-9716

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	with a copy to William M. Schutte, Esq. Polsinelli Shalton Flanigan Suelthaus PC 6201 College Boulevard, Suite 500 Overland Park, KS 66211-2435 Facsimile: (913) 451-6205
If to Licensor:	Brooke Corporation 8500 College Boulevard Overland Park, Kansas 66210 Attention: Mr. Keith E. Bouchey, CEO and President Facsimile: (913) 345-9586
	with a copy to:
	P. Mitchell Woolery, Esq. Kutak Rock LLP Suite 500 1010 Grand Boulevard Kansas City, MO 64106-2220 Facsimile: (816) 960-0041

Notices, requests, demands and other communications made under this Agreement shall be deemed to have been duly given (i) upon delivery, if served personally on the party to whom notice is to be given, (ii) on the date of receipt, refusal or non-delivery indicated on the receipt if mailed to the party to whom notice is to be given by registered or certified, postage prepaid or by overnight courier or (iii) upon confirmation of transmission, if sent by facsimile. Any party may give written notice of a change of address in accordance with the provisions of this Section 15 and after such notice of change has been received, any subsequent notice shall be given to such party in the manner described at such new address.

16. SEVERABILITY

It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the law and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any term or provision of this Agreement, or the application thereof to any person or circumstance, is adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable in any jurisdiction: (a) a substitute and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable in such jurisdiction, the intent and purpose of the invalid, prohibited or unenforceable provision; and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected by such invalidity, prohibition or unenforceability, nor shall such invalidity, prohibition or unenforceability of such provision affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

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17. COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute a single agreement.

18. NO PRESUMPTION

This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

19. FACSIMILE SIGNATURES

This Agreement and any other document or agreement executed in connection herewith (other than any document for which an originally executed signature page is required by law) may be executed by delivery of a facsimile copy of an executed signature page with the same force and effect as the delivery of an originally executed signature page. In the event any party delivers a facsimile copy of a signature page to this Agreement or any other document or agreement executed in connection herewith, such party shall deliver an originally executed signature page within three business days of delivering such facsimile signature page or at any time thereafter upon request; provided, however, that the failure to deliver any such originally executed signature page shall not affect the validity of the signature page delivered by facsimile, which has and shall continue to have the same force and effect as the originally executed signature page.

[Next page is signature page]

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IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first set forth above.

BROOKE CAPITAL CORPORATION
By:	/s/ Michael S. Hess
Name:	Michael S. Hess
Its:	Vice Chairman
BROOKE CORPORATION
By:	/s/ Keith E. Bouchey
Name:	Keith E. Bouchey
Its:	President and CEO

[Signature page to Trademark License Agreement]

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SCHEDULE A
MARKS

Mark	Registration No.		Registration Date
		1,588,160	12/26/1989
		3,043,891	1/17/2006

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TRADE NAMES

Brooke Franchise

Brooke Insurance

Brooke Insurance and Financial Services

Brooke Insurance and Financial Services, LLC

Brooke Auto Insurance

Brooke Business Insurance

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USAGE GUIDELINES
(2004 version)

Brooke 13-line Logo:

• Font type for “B” = Times Bold

• Font type for BROOKE = Times Bold

• Font type for Tag = Times Bold

• Font size ratio for Tag line = 0.15 of total logo height

• Local tag line ratio: 0.1 of total logo height

• Background Color = WHITE

• “B” starts 5^th line from bottom

• BROOKE Block ends 4 lines from bottom

• Width is 3X’s height

• “B” and “BROOKE” are exactly centered

• 13 total lines

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EX-99.3

EXHIBIT 99.3

EXECUTION COPY

AMENDED AND RESTATED
SERVICING AND TAX ALLOCATION AGREEMENT
BETWEEN
BROOKE CORPORATION
BROOKE FRANCHISE CORPORATION
AND
BROOKE CAPITAL CORPORATION

This Amended and Restated Servicing and Tax Allocation Agreement was made and entered into originally as of January 1, 2007 (the “Original Agreement”), and is hereby amended and restated in its entirety as of this 15th day of November, 2007 (the “Agreement”), by and between Brooke Franchise Corporation, a Missouri Corporation (the “BFC “), Brooke Corporation, a Kansas corporation (“BC”), and Brooke Capital Corporation, a Kansas corporation formerly known as First American Capital Corporation (“BCC”).

WHEREAS, BFC is a wholly-owned subsidiary of BC and as of the date hereof, BFC will be merged with and into the BCC (the “Merger”), with BCC being the surviving corporation. The Merger is effective on and as of November 15 2007 (the “Closing Date”).

WHEREAS, BFC and BCC desire to engage BC to provide the Services (as defined below) to the BFC and to BCC, as BFC’s successor, according to the terms and subject to the conditions set forth herein.

WHEREAS, the BCC and BC hereto have entered into a separate Tax Allocation Agreement regarding the allocation of taxes between the consolidated entities as set forth therein.

WHEREAS, the BCC and BC have entered into a separate Licensing Agreement for the purposes of using the name “Brooke” and such trademarks and service marks as are registered by BC with the United State Patent and Trademark Office or claimed by BC and pending registration with such Trademark Office (collectively, such name and marks to be referred to as the “Licensed Marks”) solely in connection with the BFC and BCC ’s operation of their business.

NOW THEREFORE, in consideration of the premises and the agreements, covenants and representations herein contained, the parties hereto agree as follows:

1. The Services. The Original Agreement is hereby amended and restated in its entirety and replaced by this Agreement except that all amounts incurred and owing prior to the date of this Agreement shall be paid promptly. BCC, as the surviving corporation of the Merger, is being added as a party hereto.

a.	BCC hereby agrees to operate BFC as a separate unincorporated division (“Division”) after the Merger for the purposes of this Agreement. BC and BCC shall use reasonable best efforts to determine in good faith which Services (and payments and reimbursements in respect thereof) relate to the Division and which relate to the other operations of BCC.
b.	BC shall provide to the Division the services described in Exhibit A, Schedule of Services, attached hereto (which services are hereinafter referred to as the “Services”). BC shall have no obligation to perform any services or have any obligations pursuant to this Agreement, except as specifically set forth on Exhibit A, or otherwise specifically set forth in this Agreement. BC shall perform the Services in accordance with its customary standards, policies and procedures in performing similar obligations with respect to similarly situated third parties. BC shall not be required to expand its facilities, incur capital expenses, maintain the employment of any specific personnel or employ additional personnel in order to provide the Services to Company. In providing the Services, BC, as it deems necessary or appropriate in its reasonable discretion, may use its personnel and/or employ the services of third parties for the efficient performance of any of the Services. BC shall notify BCC of any event involving a disruption in the performance of the Services or any possible breach of security potentially affecting information of the Division or its customers or the facilities of the Division.
c.	BCC shall, in a timely manner, take all actions as may be reasonably necessary or desirable to enable or assist BC in the provision of the Services, including, but not limited to, providing necessary information and specific written authorizations, consents and signatures, and BC shall be relieved of its obligations hereunder to the extent that Division’s failure to take any such action renders performance by BC of such obligations unlawful or impracticable.
d.	BC and First American Capital Corporation (the predecessor to BCC) have separately entered into that certain Servicing Agreement dated as of December 8, 2006 (the “BCC Servicing Agreement”). BCC and BC do not intend that this Agreement shall affect, restrict or modify the BCC Servicing Agreement.
e.	It is the intent of the parties that, notwithstanding the foregoing, BC and BCC will work together in good faith to effect an orderly transition of the Services to conform with the services provided under the BCC Servicing Agreement. As such Services (e.g., health care benefits, etc.) are transitioned and effected from BC to BCC, BC shall no longer have the responsibility to provide such Services even if such transition and effectiveness occurs prior to December 31, 2007.

2.	Term. The term of this Agreement has begin on December 8, 2006 and shall terminate on December 31, 2007, subject to the terms and provisions of Section 6 below.
3.	Contract Sum.

a. In consideration of the performance of the Services by BC, BCC shall pay to BC the fees set forth in the Schedule of Fees attached hereto as Exhibit B (the “Contract Sum”) at the times and in accordance with Exhibit B. The Contract Sum shall be the sole compensation due BC in connection with its performance of the Services.

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b. BC shall be entitled to reimbursement from BCC and the Division for out-of-pocket expenses incurred in the performance of the Services. BC shall provide to BCC an invoice setting forth any expenses to which it is entitled to reimbursement under this Subsection 3b and payment of the invoice amount due shall be due on or before the 20^th calendar day after the date of the invoice.

c. BCC shall be responsible for fees incurred in connection with retaining any third party independent contractors, subcontractors, outside counsel, external accountant or auditors, internal audit consultants, tax consultants and tax preparers, or other third parties in connection with performing the Services. Such fees and expenses of such persons shall be paid directly by the BCC or, at BC’s option, paid by BC and reimbursed by BCC after invoice in accordance with the reimbursement of expense provisions contained in Subsection 3b of this Agreement.

4. Events of Default by BC. The following shall constitute “BC Events of Default”:

a. failure on the part of BC to observe or perform in any material respect any of the covenants or agreements on the part of BC as set forth in this Agreement which continues for a period of fifteen (15) days after the date upon which written notice of such failure, requiring the same to be remedied, shall have been given to BC by the BCC (unless such failure is the result of the BCC ’s failure to observe or perform any of its obligations hereunder, in which case BC’s failure shall not constitute an event of default); or

b. a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or appointing a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against BC and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) days; or

c. BC shall consent to the appointment of a trustee, conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to BC or of or relating to all or substantially all of the property of BC; or

d. BC shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations or take any action in furtherance of the foregoing.

5. Events of Default by the BCC . The following shall constitute “BCC Events of Default”:

a. any failure by the BCC to make any payment required to be made by the BCC to BC within 20 days of the date of invoice date; or

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b. any failure on the part of BCC to observe or perform in any material respect any other of the covenants or agreements on the part of BCC as set forth in this Agreement or any governing document by and between BCC and BC for Services which continue for a period of fifteen (15) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Division by BC; or

c. a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or appointing a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the BFC and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) days; or

d. BCC shall consent to the appointment of a trustee, conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the BCC or of or relating to all or substantially all of the property of BCC ; or

e. BCC shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations or take any action in furtherance of the foregoing.

6. Remedies.

(a) Remedies of the BCC . If a BC Event of Default shall occur, BCC (i) may terminate this Agreement by giving thirty (30) days prior written notice to BC, and (ii) shall be entitled to any and all other rights and remedies under law or in equity.

(b) Remedies of BC. If a BCC Event of Default shall occur, BC (i) may terminate this Agreement by giving thirty (30) days prior written notice to the BCC, and (ii) shall be entitled to any and all other rights and remedies under law or in equity.

(c) Payment of Fees Upon Termination. Whether this Agreement is terminated through Section 2 or Section 6, BC shall be entitled to be timely paid any and all fees which remain accrued and unpaid through the final date of the rendering of the Services, including without limitation all amounts owing by BFC prior to the date of this Agreement. In addition, within five (5) business days of any termination, BC will return any of the BCC ‘s materials at the BCC’s expense. The terms and provisions of this Section 6(c) shall survive any termination of this Agreement.

(d) Limitation of Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES. Additionally, the BCC acknowledges that BC is merely providing a service for a fee under this Agreement. Accordingly, BC shall not be liable to BCC under this Agreement under any circumstances for any amounts in excess of any fees paid to BC hereunder. BC MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER WITH RESPECT TO THE SERVICES TO THE DIVISION AND ITS SUBSIDIARIES AND AFFILIATES AND SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. The terms and provisions of this Section 6(d) shall survive any termination of this Agreement.

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7. Notices. No notice or other communication shall be deemed given unless sent in any of the manners, and to the persons, specified in this Section. All notices and other communications hereunder shall be in writing and shall be deemed given (a) upon receipt if delivered personally (unless subject to clause (b)) or if mailed by registered or certified mail, (b) at noon on the date after dispatch if sent by overnight courier or (c) upon the completion of transmission (which is confirmed by telephone or by a statement generated by the transmitting machine) if transmitted by telecopy or other means of facsimile which provides immediate or near immediate transmission to compatible equipment in the possession of the recipient, in any case to the parties at the following addresses or telecopy numbers (or at such other address or telecopy number for a party as will be specified by like notice):

If to BFC
and BCC:	Brooke Franchise Corporation Brooke Capital Corporation 10950 Grandview Drive, Suite 500 Overland Park, Kansas 66210 Kyle L. Garst, CEO and President Fax: (913) 645-6334
If to BC:	Brooke Corporation 8500 College Boulevard Overland Park, Kansas 66210 Attn: Keith E. Bouchey, CEO and President Fax: (913) 345-9586

8. Independent Contractor. In its performance and completion of the Services and any of its other duties and obligations under this Agreement, BC shall at all times be deemed to be an independent contractor and nothing in this Agreement shall at any time be construed so as to create the relationship of employer and employee, principal and agent, partnership or joint venture as between BC and BCC . BC shall have the entire charge, control and supervision of its performance of the Services and any of its other duties and obligations under this Agreement, subject to the terms and provisions of this Agreement and Exhibit A hereto. Both parties acknowledge that they shall have no authority to bind the other party to any contractual or other obligation whatsoever.

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9.	Indemnity. BC agrees to indemnify, defend and hold harmless BCC and its directors, members, managers, officers and employees from and against any and all loss, liability, claim, damage, cost or expense (including without limitation reasonable legal fees and expenses and all other costs and expenses incurred in investigating, preparing for or defending any proceeding, commenced or threatened, incident to the foregoing or to the enforcement of this Section 9) suffered or incurred by the BCC and arising out of, or in connection with (i) any act or omission of BC or any of its employees, (ii) any breach by BC of any covenant, obligation or representation or warranty (as of the date when made) of BC contained in this Agreement, and/or (iii) any claim by any third party in any way related directly or indirectly to the subject matter of this Agreement unless the claim relating thereto is directly attributable to breach of this Agreement, willful misconduct, bad faith, fraud or negligence of the BCC or any of its directors, members, managers, officers or employees.
	BCC hereby agrees to indemnify, defend and hold harmless BC and its directors, members, officers and employees from and against any and all loss, liability, claim, damages, cost or expense (including without limitation reasonable legal fees and expenses and all other costs and expenses incurred in investigating, preparing for or defending any proceeding, commenced or threatened, incident to the foregoing or to the enforcement of this Section 9) suffered or incurred by BC or its directors, members, officers and employees for or on account of or arising out of or in connection with (i) any breach by BCC of any covenant, obligation or representation or warranty (as of the date when made) of the BCC contained in this Agreement, and/or (ii) any claim directly attributable to willful misconduct, bad faith, fraud or negligence of BCC or any of its directors, members, managers, officers or employees.
10.	Confidentiality. Each party (the “Receiving Party”) agrees and acknowledges that, except to the extent permitted herein, all information and data supplied by the other party (the “Disclosing Party”) regarding its matters, systems, procedures, assets or operations shall be held in strict confidence at all times and the Receiving Party will not disclose or otherwise divulge any of such information to any party without the prior written consent of the Disclosing Party. Provided, however, that the Receiving Party shall be authorized to disclose such information (i) to any of its directors, members, officers, employees, representatives, accountants, auditors, attorneys and agents and to any of its affiliates, subsidiaries and parents and any of their respective directors, members, officers, employees, representatives, accountants, auditors, attorneys and agents to the extent any of them have a need to know such information to perform services hereunder and only for such purpose and agree in writing to keep such information confidential (collectively referred to herein as “Receiving Party’s Representatives”); (ii) to any government agency with jurisdiction over the Receiving Party or the Receiving Party’s Representatives or the transaction contemplated herein; (iii) as may be required by law or regulation, judicial or administrative order, ruling or judgment or legal obligation to disclose (which may include, by way of example and not by way of limitation, any discovery or disclosure demands or requirements issued or arising in any judicial or administrative investigation or proceeding); (iv) if it is advised by its counsel that its failure to do so would be unlawful, or (v) if failure to do so would expose the Receiving Party to loss, liability, claim or damage for which it has not been adequately indemnified to its satisfaction. The terms and provisions of this Section 10 shall survive any termination of this Agreement.

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11.	Assignability. This Agreement may be assigned by either party hereto to any entity buying substantially all of the assigning party’s assets or ownership interests, provided such entity executes an assumption agreement reasonably acceptable to the non-assigning party.
12.	Governing Law. This Agreement and the respective rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of Kansas, without regard to its conflicts of laws provisions.
13.	Successors and Assigns. This Agreement and the terms, covenants, provisions and conditions hereof shall be binding upon, and shall inure to the benefit of, the respective heirs, successors and assigns of the parties hereto; provided, however, that, except as set forth in Section 11 above, neither party shall assign this Agreement, or otherwise dispose of all or any portion of its right, title or interest herein, to any person or entity without the prior written consent of the other party. There shall be no third party beneficiaries to this Agreement. This Agreement is not intended to confer on any person other than the parties hereto and their successors and permitted assigns any rights, obligations, remedies or liabilities.
14.	Merger. Any corporation or limited liability company into which either party may be merged or converted or with which it may be consolidated, or any corporation or limited liability company resulting from any merger, conversion or consolidation to which either party shall be a party, or any corporation or limited liability company succeeding to the business of such party shall be successor of such party hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.
15.	Severability. If any provision of this Agreement is held to be invalid or unenforceable, then, to the extent that such invalidity or unenforceability shall not deprive either party of any material benefit intended to be provided by this Agreement, the remaining provisions of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto.
16.	Jury Trial. The parties hereto hereby knowingly and voluntarily waive any right which either or both of them shall have to receive a trial by jury with respect to any claims, controversies or disputes which shall arise out of this Agreement or the subject matter hereof.
17.	Entire Agreement. This Agreement and the exhibits and schedules attached hereto embody the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, oral or written, relating to said subject matter. Any exhibits and schedules to this Agreement are hereby incorporated into this Agreement in their entirety by this reference.
18.	Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which shall together constitute one and the same agreement. The parties hereto agree that facsimile signatures on this Agreement shall be deemed effective as originals by the parties for all purposes.

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19.	Headings. The headings of the Sections contained in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.
20.	Waiver. All remedies available to either party for one or more breaches by the other party are and shall be deemed cumulative and may be exercised separately or concurrently without waiver of any other remedies. No party hereto shall be deemed to have waived any right, power or privilege under this Agreement unless such waiver shall have been expressed in a written instrument signed by the waiving party. The failure of any party hereto to enforce any provision of this Agreement shall in no way be construed as a waiver of such provision or a right of such party to thereafter enforce such provision or any other provision of this Agreement.
21.	Construction. Unless the context of this Agreement otherwise clearly requires, (i) references in this Agreement to the plural include the singular, the singular the plural, the masculine the feminine, the feminine the masculine and the part the whole and (ii) the word “or” will not be construed as exclusive and the word “include,” “including” or similar terms shall be construed as if followed by the phrase “without being limited to.”
22.	Dispute Resolution. Any issue, claim or dispute that may arise out of or in connection with this Agreement (including exhibits and addenda) and/or the relationship of the parties and which the parties are not able to resolve themselves by negotiation, shall be submitted to mediation in a manner agreed to by the parties. The parties agree to use mediation to attempt to resolve such issue, claim or dispute prior to filing any arbitration action, lawsuits, complaints, charges or claims. The parties 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 the parties. 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 in Overland Park, Kansas.
23.	Dispute Resolution: Arbitration. Any issue, claim, dispute or controversy that may arise out of, in connection with or relating to this Agreement (including exhibits and addenda) and/or the relationship of the parties, and which the parties are not able to resolve through mediation, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Judgment on the award rendered by the arbitrator(s) may be entered in a court having jurisdiction thereof. The parties agree to use arbitration to resolve any such issue, claim, dispute or controversy in lieu of filing any lawsuits, complaints, charges or claims. The costs of the arbitration and fees of the arbitrator(s) will be borne equally by the parties.

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End of agreement; balance of page left blank; signature page follows

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

Brooke Franchise Corporation

/s/ Kyle L. Garst

By: Kyle L. Garst
Title: CEO & President

Brooke Corporation

/s/ Keith E. Bouchey

By: Keith E. Bouchey
Title: CEO & President

Brooke Capital Corporation

/s/ Michael S. Hess

By: Michael S. Hess
Title: Vice Chairman

[Signature page to Amended and Restated Servicing and Tax Allocation Agreement]

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EXHIBIT A
Schedule of Services

BC shall perform the following services:

Permanent and Confidential Document Management

• Provide secure facilities for storage of referenced documents

• Establish procedures for filing and physical security of referenced documents

• Establish procedures for electronically storing and electronic security of referenced documents

External Audit Services

• Coordinate audit activities with external auditors

• Gather and provide information requested by external auditors

• Facilitate and collaborate work for external auditors

• Compile audit books in accordance with Audit Minute Book Memorandum

Internal Audit/Internal Control Services

• Conduct internal audits of the BFC and its systems, procedures, policies and processes

• Evaluate the adequacy and effectiveness of internal controls

• Develop and recommend changes in operations, policies, procedures or controls to increase efficiency of operations or to improve safeguards over internal controls

• Develop and implement audit plans and programs

• Develop and implement audit procedures

• Prepare written reports as needed and communicate as necessary

• Perform audit procedures and prepare work papers documenting the audit procedures performed

• Review transactions, documents, records, reports, policies and procedures for accuracy and effectiveness and to help ensure that they are followed

Risk Management Services

• Provide insurance

• Provide information about insurance policies

• Analysis of risk identification reports

Transportation services

• Provide access to Brooke Bus

• Provide access to Corporate vehicles

• Coordination of corporate transportation

• Schedule commercial air travel for the BFC ’s senior management

• Schedule private air travel for the BFC ’s senior management

• Schedule lodging, car rental and other related travel expenses for the BFC ’s senior management

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• Monitor travel expenses (including compilation of monthly reports detailing travel expenses for all employees) to assist the BFC ’s management in monitoring travel expenses

• Monitor employee expense reports

Corporate recruiting assistance

• Develop advertising and recruitment campaigns for BFC ’s senior management

• Conduct initial phone screening for BFC Senior Management

• Prepare post interview communications with prospects who are hired and not hired

• Track and Measure the effectiveness of recruitment sources and activities

• Develop and maintain recruitment procedures, forms and tools

• Prepare recruitment analysis

• Distribute periodic recruitment analysis, priorities and progress reports

• Manage, coordinate and attend career fairs

• Manage, coordinate and develop Brooke careers website

• Conduct internal postings as requested

• Develop and maintain relationship with CareerBuilder.com, Monsterjobs.com, HotJobs.com, etc.

Training services

• Provide instructors and materials for academy training

• HR instruction

• Compliance instruction

Facilities Services

• Track fixed assets for the BFC

Transaction services

• Provide advice on franchise termination and rehabilitation issues

• Provide consultation with respect to “Hot Spots”

• Provide legal counsel to BFC on transaction related matters

• Assist with problem resolution (including post transaction, franchise agent and other issues)

• Provide counsel on franchise sales compliance

• Assist with dispute resolution and litigation relating to franchisees, sellers, lending

Corporate/Regulatory Services

• Assist with dispute resolution and manage litigation relating to employment, general corporate matters

• Conduct errors and omissions training seminars

• Prepare Newsletters and other communiqués regarding errors and omissions

• Provide corporate governance advice and compliance services

• Assist in the development and maintenance of corporate policies

• Assist with problem resolution (other than post transaction and franchisee issues)

• Prepare and/or assist in preparation of communications to the franchisee force

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• Handle general corporate matters

• Coordinate SEC filings (Registrations statements, proxy statements, 10K, 10Q, 8K, Forms 3, 4 and 5, etc.)

• Coordinate responses to consumer and regulatory complaints and investigations

• Set up claim file for each incident

• Investigate all complaints, prepare and submit response

• Set up E&O file if appropriate

• Investigate and respond to regulatory investigations

• Create and furnish all forms required for claims administration and management

• Obtain or create a chronological summary of complaints or matter investigated and actions taken

• Respond to, settle or resist or controvert all complaints and/or investigations

• Supervise litigation and other proceedings involving complaints and investigations

• Participate in mediations and alternative dispute resolutions

• Maintain in accordance with a records retention policy complaint and investigation files

• Issue checks in payment of complaints and associates costs and expenses

• Maintain a detailed check register

• Track complaint and investigation activities

• Prepare complaint and investigation activity reports

• Prepare settlement and other documents as needed

• Monitor complaint and investigatory activities and institute rehabilitation measures as deemed necessary

• Seek to identify and report to the BFC and its regulators any fraudulent or suspect activity, as deemed advisable

• Select and retain adjusters and other professionals to assist in complaints and investigations; monitor performance and costs of such professionals; initiate payment of such professionals

• Invoice the BFC to recover amounts paid in connection with complaints and investigations (see also errors and omissions claims handling)

• Prepare complaint and investigation related reports on a monthly basis which may include:

• Franchisee number

• Customer name

• Customer number

• Region

• Location

• Complaint received

• Type of complaint/investigation

• Description of incident

• Associated payments

• Description of resolution

• Coordinate corporate and franchise agent licensing

• Complete, submit, track and follow-up on licensing and application forms

• Review agent license forms

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• Order and report on background investigations of franchisees

• Maintain license compliance database

• Coordinate and submit surplus lines filings

• Communicate with franchisees and their staff regarding licensing issues

• Communicate with regional office staff on licensing issues

• Complete, submit, track and follow-up on foreign authority and assumed named applications

• Complete, submit, track and follow-up on annual report filings

• Oversee corporate compliance with respect to BFC operations

• Manage and oversee errors and omissions activities

• Process claims

• Set up claim file for each incident

• Determine coverage with respect to each claim and refer to supplier for final determination of claims as necessary

• Investigate all claims and recommend the amount of loss and expense reserve to establish

• Furnish all claims forms required for claims administration and management

• Obtain or create a chronological summary of claim background and claims actions taken

• Adjust, settle or resist or controvert all claims within discretionary authority

• With errors and omissions supplier approval, adjust, settle or resist or controvert claims outside discretionary authority

• Supervise litigation and other proceedings involving errors and omissions

• Participate in mediations

• Maintain in accordance with a records retention policy errors and omissions files

• Issue checks in payment of claims and associates costs and expenses

• Maintain a detailed check register

• Track errors and omissions claims activities

• Prepare errors and omissions claims activity reports

• Prepare settlement and other errors and omissions documents as needed

• Monitor claims activities and institute rehabilitation measures as deemed necessary

• Seek to identify and report to the BFC any fraudulent or suspect activity

• Select and retain adjusters and other professionals to assist in errors and omissions claims; monitor performance and costs of such professionals; initiate payment of such professionals

• Invoice the BFC to recover deductible

• Prepare claims related reports on a monthly basis which may include:

• Franchisee number

• Customer name

• Customer number

• Region

• Location

• Claim report date

• Type of claim

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• Description of incident

• Associated payments

• Description of resolution

• Prepare reports as required by errors and omissions suppliers, MGA’s, reinsurers

• Provide status reports as requested to the BFC with respect to errors and omissions activities

• Invoice the BFC for premiums associated with new franchisees

• Administer and reconcile deductible fund

• Assist with corporate governance

• Subsidiary secretaries

• Maintain corporate books and records

• Assist with internal controls

• Intellectual property assistance

• Seek and maintain service and trade marks

• Seek and maintain patents

IT support services

• Provide corporate computer support

• Develop, coordinate and maintain IT systems

• Develop, coordinate and maintain IT security systems

• Develop, coordinate and maintain backup information systems

• Provide platform for and maintenance of document management

• Provide platform for and maintenance of personal management

• Assist in data collection and maintenance

• Provide database maintenance

• Generate reports from information systems as requested

• Order corporate computers, other hardware and software to optimize purchasing power

• Track corporate computers, other hardware and software

• Provide IT consultation on an as needed basis

• IT analysis and maintenance

• Monitor server needs and provide upgrades as needed or requested

• Analyze Software needs and provides upgrades as needed or requested

• Develop, coordinate and maintain programs for Brooke Management System

• Assist in training personnel on information systems

Human resources services

• Provide experienced personnel to assist in BFC operations

• Assist in employee relations and retention

• Provide manager counseling and advisory services

• Conduct employee investigations

• Maintain personnel files

• Assist in the design and implementation of human resources policies and procedures

• Monitor changes in employment practices laws

• Implement practices to reduce EPL exposures

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• Investigate and work to resolve employee relation issues and complaints

• Conduct onsite and remote employee training

• Conduct employee orientation

• Consult with managers regarding personnel issues

• Design and conduct management training with respect to employment practices issues

• Assist in recruitment process (e.g. design and review recruitment advertising, design and review applications, assist in interview design and process, conduct reference checks)

• Assist in evaluation and discipline process

• Assist in termination process (e.g. exit interviews, pre and post termination consultations with management);

• Manage and assist in preparation of job descriptions

• Assist in ensuring compliance with applicable laws

• Coordinate third party training

• Assist in preparation of employment agreements and forms

• Assist in transitioning of new sales and service centers

• Provide benefit administration and communication

• Assist in the design and selection of benefit packages and providers

• Conduct salary surveys

• Manage performance evaluation process

• Manage FMLA and leave of absences policies and procedures

• Provide workers compensation administration and OSHA reporting

• Prepare and provide HR inspection reports

• Inspect the BFC ’s human resources operations

• Report the findings of such inspection

• Make recommendations regarding such operations

• Prepare a written report of such recommendations

• Provide samples of documents, policies and procedures for reference

Payroll Accounting

• Payroll processing

• Solve problems concerning payroll and enforce payroll policies.

• Compile payroll data such as garnishments, vacation time, insurance and 401(k) deductions.

• Administer time and attendance system for accuracy and completeness

• Process weekly transfer of payroll data to ADP

• Provide applicable state and federal wage and hour compliance services

• Prepare reports for management (gross payroll, hours worked, vacation accrual, tax deductions, benefit deductions, etc.)

• Provide access to payroll service provider

• Respond to employee questions

• Process payroll deductions

• Determine if vendor charges for benefits are accurate

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Cash Management services

• Provide daily cash management

• Analyze cash needs and inform BFC accordingly

• Prepare quarterly cash reports for BFC and its auditors

• Prepare monthly bank reconciliations for BFC ’s operating bank accounts

• Balance cash accounts to the general ledger

• Review check requests for accuracy and issue checks

• Submit ACH file to Bank for franchisee settlements

• Reconcile weekly bank statements and balance to the general ledger

• Send ACH file to Bank withdrawing funds from the Receipts Trust Account

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EXHIBIT B

Schedule of Fees

BCC, on behalf of the Division, shall pay the following fees to BC:

The Contract Sum under the Original Agreement was an annual fee of $4.8 Million payable in 12 equal monthly installments. For any portion of the Contract Sum that was incurred but not paid prior to the Closing Date, BCC shall pay such portion to BC including for any partial months.

The Contract Sum from and after the Closing Date shall be zero dollars. BCC shall remain responsible and liable for all expenses and amounts set forth in sections 3b and 3c of this Agreement.