EXCHANGE AGREEMENT

Asset Exchange Agreement

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BROOKE CAPITAL CORPORATION | BROOKE CORPORATION | DELTA PLUS HOLDINGS, INC

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Title: EXCHANGE AGREEMENT
Governing Law: Kansas Date: 9/7/2007
Industry: INSMSC Law Firm: Kutak Rock;Polsinelli Shalton Sector: Financial

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Exchange Agreement

Exhibit 2.2

EXECUTION COPY

EXCHANGE AGREEMENT

by and among

BROOKE CAPITAL CORPORATION,

DELTA PLUS HOLDINGS, INC.,

and

BROOKE CORPORATION

Dated as of August 31, 2007

TABLE OF CONTENTS


			Page
1.	EXCHANGE		2
	1.1.	The Exchange	2
	1.2.	[Reserved]	2
	1.3.	[Reserved]	2
	1.4.	Exchange Consideration	2
	1.5.	[Reserved]	3
	1.6.	Exemptions from Registration; Restrictions on Resale	3
	1.7.	[Reserved]	4
	1.8.	[Reserved]	4
	1.9.	Exchange of Certificates	4
	1.10.	No Fractional Shares	4
	1.11.	Market Stand-off Agreement	4
	1.12.	Further Action	5
2.	REPRESENTATIONS AND WARRANTIES OF PARENT AND COMPANY		5
	2.1.	Corporate	5
	2.2.	Authority	6
	2.3.	Capitalization	6
	2.4.	No Violation	6
	2.5.	Financial Statements	7
	2.6.	Absence of Undisclosed Liabilities or Encumbrances	7
	2.7.	Tax Matters	8
	2.8.	No Brokers or Finders	9
	2.9.	Disclosure	9
	2.10.	Purchase for Own Account	10
	2.11.	Absence of Certain Changes	10
	2.12.	No Litigation; Administrative Actions	12
	2.13.	Compliance With Laws	12
	2.14.	Title to and Condition of Properties	13
	2.15.	Contracts and Commitments	14
	2.16.	Labor Matters	15
	2.17.	Employee Benefit Plans	16
	2.18.	Intellectual Property	17
3.	REPRESENTATIONS AND WARRANTIES OF CAPITAL		17
	3.1.	Corporate	17
	3.2.	Authority	17
	3.3.	Capitalization	18
	3.4.	No Violation	18
	3.5.	Reports	18
	3.6.	Financial Statements	19
	3.7.	Absence of Undisclosed Liabilities	19
	3.8.	Tax Matters	20
	3.9.	No Brokers or Finders	20
	3.10.	Disclosure	21
	3.11.	Company Stock for Capital’s Own Account	21
	3.12.	[Reserved]	21
	3.13.	Absence of Certain Changes	21


	3.14.	No Litigation	22
	3.15.	Compliance With Laws	23
	3.16.	Title to and Condition of Properties	23
	3.17.	Contracts and Commitments	24
	3.18.	Labor Matters	25
	3.19.	Employee Benefit Plans	25
	3.20.	Intellectual Property	26
4.	COVENANTS		26
	4.1.	Conduct of the Business	26
	4.2.	Access to Information	28
	4.3.	Confidentiality	28
	4.4.	Public Disclosure	29
	4.5.	Regulatory and Other Authorizations; Form A	29
	4.6.	Further Assurances	29
	4.7.	No Solicitation by Parent or Company	30
	4.8.	No Solicitation by Capital	30
	4.9.	Non-Competition; Non-Solicitation	30
	4.10.	Indemnification of Officers and Directors	31
	4.11.	Company Name and Principal Office	32
5.	ADDITIONAL AGREEMENTS		32
	5.1.	Other Matters	32
	5.2.	Form 8-K	32
	5.3.	Required Information	33
	5.4.	No Securities Transactions	33
	5.5.	Registration and Listing	33
	5.6.	[Reserved]	33
	5.7.	[Reserved]	33
	5.8.	Litigation Support	34
6.	CONDITIONS PRECEDENT TO CAPITAL’S PERFORMANCE		34
	6.1.	Accuracy of Representations and Warranties of Parent and Company	34
	6.2.	Performance of Covenants of Parent and Company	34
	6.3.	No Governmental Order	34
	6.4.	[Reserved]	34
	6.5.	Corporate Approval	35
	6.6.	[Reserved]	35
	6.7.	Consents and Approvals	35
	6.8.	Absence of Litigation	35
	6.9.	Company Material Adverse Effect	35
	6.10.	Fairness Opinion	35
	6.11.	[Reserved]	35
	6.12.	Deliverables	35
	6.13.	Parent Capital Contribution	35
	6.14.	Approval	35
7.	CONDITIONS PRECEDENT TO COMPANY’S PERFORMANCE		35
	7.1.	Accuracy of Capital’s Representations and Warranties	35
	7.2.	Performance of Capital’s Covenants	36


	7.3.	No Governmental Order	36
	7.4.	Corporate Approval	36
	7.5.	Parent Payable	36
	7.6.	Absence of Litigation	36
	7.7.	Capital Material Adverse Effect	36
	7.8.	Capital’s Articles of Incorporation	36
	7.9.	Consents and Approvals	36
	7.10.	Payments	37
	7.11.	Deliverables	37
	7.12.	[Reserved]	37
	7.13.	Fairness Opinion	37
	7.14.	[Reserved]	37
	7.15.	Merger	37
8.	TERMINATION PRIOR TO CLOSING		37
	8.1.	Termination	37
	8.2.	Effect on Obligations	38
9.	THE CLOSING		38
	9.1.	Closing	38
	9.2.	Company’s Obligations	38
	9.3.	Capital’s Obligations	39
10.	INDEMNIFICATION		39
	10.1.	Survival of Representations and Warranties	39
	10.2.	Indemnification Obligations	40
	10.3.	Exclusive Remedy	41
11.	MISCELLANEOUS PROVISIONS		42
	11.1.	Entire Agreement	42
	11.2.	Governing Law	42
	11.3.	Schedules	42
	11.4.	Waiver and Amendment	42
	11.5.	Assignment	42
	11.6.	Successors and Assigns	42
	11.7.	No Third Party Beneficiaries	42
	11.8.	No Personal Liability	43
	11.9.	Notices	43
	11.10.	Severability	43
	11.11.	Counterparts	44
	11.12.	No Presumption	44
	11.13.	Facsimile Signatures	44
	11.14.	Fees and Expenses	44
12.	DEFINITIONS		45
	12.1.	Definitions	45
	12.2.	Cross-References	50
	12.3.	Interpretation	51

iii

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (this “Agreement”) is made and entered into as of August 31, 2007 by and among BROOKE CAPITAL CORPORATION, a Kansas corporation (“Capital”), DELTA PLUS HOLDINGS, INC., a Missouri corporation (the “Company”), and BROOKE CORPORATION, a Kansas corporation and sole stockholder of the Company (“Parent”).

RECITALS

A. Parent owns all of the issued and outstanding shares of common stock, par value $1.00 per share (“Company Stock”), of the Company. Parent and Capital have determined that a business combination between the Company and Capital, to be effected by a exchange described in Section 1.1 below (the “Exchange”) by Parent of all of its right, title and interest in the Company Stock to Capital in exchange for the issuance of Capital Stock (as further described in Section 1.1 below), upon the terms and subject to the conditions set forth herein, is advisable and in the best interests of their respective companies and stockholders, and presents an opportunity for the companies to achieve long-term strategic and financial benefits.

B. The board of directors of Capital unanimously (i) has determined that the Exchange is fair to, and in the best interests of, Capital and its shareholders and (ii) has approved and declared the advisability of entering into this Agreement. The board of directors of Parent unanimously (i) has determined that the Exchange is fair to, and in the best interests of, Parent and its shareholders and (ii) has approved and declared the advisability of entering into this Agreement.

C. At the Closing of the Exchange, Parent will transfer and contribute the Company Stock to Capital in accordance with the terms hereof. As a result of the Exchange, Parent will (i) own (combined with Parent’s previous ownership) more than 80% of the outstanding common stock of Capital, on a fully diluted basis; and (ii) “control” Capital as defined in and within the meaning of Section 368(c) of the Internal Revenue Code of 1986, as amended (the “Code).

D. The parties hereto intend that the Exchange qualify for income tax purposes as a tax-free exchange pursuant to Section 351 of the Code.

E. Certain capitalized terms used in this Agreement are defined in Section 12 below.

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.	EXCHANGE

1.1.

The Exchange. Upon the terms and subject to the conditions set forth herein and the applicable provisions of the MGCL and the KGCL, and on the basis of the representations, warranties, covenants and agreements contained herein, on the Closing Date, Parent shall contribute the Company Stock to Capital.

1.2.

[Reserved].

1.3.

[Reserved].

1.4.

Exchange Consideration.

(a)

The initial consideration to be paid by Capital to Parent, as the sole holder of capital stock of the Company as of immediately prior to the Closing Date, in the Exchange (the “Initial Exchange Consideration”) shall be the number of shares of common stock of Capital, $0.01 par value per share (the “Capital Stock”) equal to the Closing Payment.

(b)

In addition to Initial Exchange Consideration, Capital shall pay to Parent, if earned, additional payments of Capital Stock based upon Company’s Net Income as follows:

(i)

Subject to the Company’s achievement of Net Income of at least $600,000 for the 12 month period ended December 31, 2007 (“First Earnout Period”), the Exchange Consideration shall include an additional 100,000 shares of Capital Stock (“First Earnout Shares”).

(ii)

In addition to the First Earnout Shares, subject to the Company’s achievement of Net Income of at least $900,000 for the First Earnout Period, the Exchange Consideration shall include an additional 25,000 shares of Capital Stock (“First Earnout Bonus Shares”).

(iii)

Subject to the Company’s achievement of Net Income of at least $1,600,000 for the 12 month period ended December 31, 2008 (“Second Earnout Period”), the Exchange Consideration shall include an additional 100,000 shares of Capital Stock (“Second Earnout Shares”).

(iv)

In addition to the Second Earnout Shares, subject to the Company’s achievement of Net Income of at least $2,400,000 for the Second Earnout Period, the Exchange Consideration shall include an additional 25,000 shares of Capital Stock (“Second Earnout Bonus Shares”).

(c)

The Exchange Consideration shall also be subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split, or other change in the number of shares of Capital Stock outstanding. For purposes hereof, “Exchange Consideration” means the Initial Exchange Consideration and the First Earnout Shares, the First Earnout Bonus Shares, the Second Earnout Shares and the Second Earnout Bonus Shares (collectively, the “Earnout Shares”).

(d)

As soon as practicable and in any event within 90 days after end of the First or Second Earnout Period, as the case may be, Capital shall provide to Parent a statement of the Net Income of Company for the Earnout Period (each an “Earnout Statement”), as reported in Capital’s Form 10-Q filing with the SEC for the end of such Earnout Period and as reviewed by Capital’s independent auditors. Capital shall provide to Parent and its representatives copies of such records and work papers created in connection with preparation of the Earnout Statement as are reasonably requested to support such Earnout Statement. Parent and its representatives shall have the right to inspect Capital and Company’s books and records during business hours.

(e)

Upon receipt of such Earnout Statement, Parent shall be entitled to object to the calculation of Net Income by delivery to Capital of a notice of objections thereto (a “Notice of Objection”), in reasonable detail describing the nature of the disagreement asserted. If Parent fails to deliver a Notice of Objection to Capital within twenty (20) days following receipt of the Earnout Statement, the determination of Net Income by Capital as set forth in the Earnout Statement shall be final and binding on the parties hereto. If Parent and Capital are unable to reconcile their differences in writing within twenty (20) days after a Notice of Objection is delivered by Parent, independent accountants shall be selected by Parent and Capital (“Independent Accountants”) and the items in dispute shall be submitted to the Independent Accountants within ten (10) days thereafter. The determination of Independent Accountants shall be set forth in writing and shall be conclusive and binding upon the parties, and the fees, costs and expenses of such Independent Accountants shall be paid by the non-prevailing party. The Independent Accountants shall consider only the items in dispute and shall be instructed to act within thirty (30) days (or such longer period as Parent and Capital may agree) to resolve all items in dispute. If Parent in its discretion gives written notification of its acceptance of an Earnout Statement prior to the end of such 30-day period, such Earnout Statement shall thereupon become binding, final and conclusive upon all the parties hereto.

(f)

In the event there is a Capital Change in Control prior to December 31, 2008, then and in such event, all of the Earnout Shares (less any Earnout Shares that have been paid previously) shall be paid to the Parent as Exchange Consideration irrespective of whether any of the earnout thresholds in subparts (i) through (iv) of Section 1.4(b) above are achieved.

(g)

In the event there is a Delta Change in Control prior to December 31, 2008, then and in such event, all of the Earnout Shares (less any Earnout Shares that have been paid previously) shall be paid to the Parent as Exchange Consideration irrespective of whether any of the earnout thresholds in subparts (i) through (iv) of Section 1.4(b) above are achieved.

1.5.

[Reserved].

1.6.

Exemptions from Registration; Restrictions on Resale. The parties intend that Capital Stock constituting the Closing Payment to be issued by Capital to Parent, and the Company Stock transferred to Capital by Parent in the Exchange, shall be exempt from the registration requirements of the Securities Act pursuant to Regulation D of the

Securities Act and the rules and regulations promulgated thereunder and from the applicable state securities laws and regulations. Neither the Company Stock nor Capital Stock will be registered under the Securities Act, or the securities laws of any state, and such shares cannot be transferred, hypothecated, sold or otherwise disposed of until: (i) a registration statement with respect to such securities is declared effective under the Securities Act, or (ii) an opinion of counsel, reasonably satisfactory to counsel for the affected party, that an exemption from the registration requirements of the Securities Act is available.

1.7.

[Reserved].

1.8.

[Reserved].

1.9.

Exchange of Certificates. Upon surrender of a Certificate for cancellation, together with a letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required by Capital, the holder of such Certificate shall be entitled to receive in exchange therefor an amount to which such holder is entitled pursuant to the Closing Payment and the Certificate so surrendered shall be canceled, or if there is more than one Certificate evidencing the Company Stock, then a pro rata portion of the Closing Payment determined by taking the number of shares of Company Stock reflected by any such Certificate divided by the aggregate number of shares of Company Stock and multiplying such quotient by the Closing Payment.

1.10.

No Fractional Shares. No certificates or scrip representing fractional shares of Capital Stock shall be issued upon the surrender for exchange of Certificates, and such fractional share interests will not entitle the owner thereof to vote or to any rights of a stockholder of the Company.

1.11.

Market Stand-off Agreement. Parent hereby agrees that it will not, without the prior written consent of Capital, during the period commencing on the Effective Time and for a period of one hundred eighty (180) days thereafter (“Lockup Period”) (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Capital Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for the Capital Stock received hereunder or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Capital Stock or other securities, in cash, or otherwise. Notwithstanding the foregoing, the Parent shall be permitted to pledge shares of the Capital Stock so long as its lender which takes a security interest in such shares of Capital Stock agrees to be bound by the terms and conditions of this paragraph.

The Company agrees that during the Lockup Period it will, at its sole cost and expense, file the appropriate registration statement under the Securities Act of 1933 covering all of the Capital Stock received hereunder to be registered with the Securities and Exchange Commission.

1.12.

Further Action. If at any time after the Closing Date, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest Capital with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company, the directors and officers of Capital are fully authorized in the name of the Company or Capital or otherwise to take, and shall take, all such lawful and necessary action.

2.	REPRESENTATIONS AND WARRANTIES OF PARENT AND COMPANY

Parent and the Company, jointly and severally, make the following representations and warranties to Capital, subject to the exceptions set forth in the disclosure schedule attached hereto (the “Disclosure Schedule”).

2.1.

Corporate.

(a)

Organization. Each of Parent and the Company, and each of their respective Subsidiaries, is duly organized, validly existing and in good standing under the laws of the state of its organization.

(b)

Corporate Power. Each of the Company and its Subsidiaries has all requisite power and authority to own, operate and lease its properties and to carry on its business as and where such is now being conducted. Each of Parent and the Company has all requisite corporate power and authority to enter into this Agreement and the other documents and instruments to be executed and delivered by it pursuant hereto, to perform its obligations hereunder, and to carry out the transactions contemplated hereby and thereby.

(c)

Qualification. The Company and each of its Subsidiaries is duly licensed or qualified to do business as a foreign company, and is in good standing, in each jurisdiction wherein the character of the properties owned or leased by it, or the nature of its business, makes such licensing or qualification necessary, except for such jurisdictions in which the failure to be so qualified would not have a Company Material Adverse Effect and would not materially delay the Closing or materially and adversely affect the ability of the parties to consummate the transactions contemplated hereby or continue the ordinary course business operations of any such entity following Closing.

(d)

Ownership. Parent is the owner, beneficially and of record, of all of the issued and outstanding shares of common stock of the Company. The Company is the owner, beneficially or of record, directly or indirectly, of all of the issued and outstanding shares of common stock or equity interest of the following entities: Traders Insurance Connection, Inc., Traders Insurance Company, Professional Claims, Inc., and Christopher Joseph & Company (each a “Company Subsidiary” and collectively the “Company Subsidiaries”). The Company does not own any Subsidiaries other than the Company Subsidiaries.

2.2.

Authority. The execution, delivery and performance of this Agreement and the other documents and instruments to be executed and delivered by Parent and the Company pursuant hereto and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary parties (other than approval of the board of directors of the Company). No other or further act or proceeding on the part of Parent or the Company (other than approval of the board of directors of the Company) is necessary to authorize this Agreement or the other documents and instruments to be executed and delivered by Parent or the Company pursuant hereto or the consummation of the transactions contemplated hereby and thereby. This Agreement constitutes, and when executed and delivered, the other documents and instruments to be executed and delivered by Parent and the Company pursuant hereto will constitute, legal, valid and binding agreements of Parent and the Company, enforceable in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or similar Laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

2.3.

Capitalization. The authorized capital stock of the Company consists of 30,000 shares of common stock, par value $1.00 per share, of which 1,000 shares are issued and outstanding and all of which are owned by the Parent. All of the outstanding shares of common stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable and were issued in compliance with all applicable Laws. All of the outstanding shares of common stock or other equity ownership interests of each of the Company Subsidiaries have been duly authorized and are validly issued, fully paid and nonassessable and were issued in compliance with all applicable Laws. There are no outstanding subscription, option, warrant, call rights, preemptive rights or other agreements or commitments obligating the Company or any Company Subsidiary to issue, sell, deliver or transfer (including any rights of conversion or exchange under any outstanding security or other instrument) any economic, voting, ownership or any other type of interest or security in the Company or any Company Subsidiary.

2.4.

No Violation.

(a)

Neither the execution and delivery of this Agreement or the other documents and instruments to be executed and delivered by Parent and the Company pursuant hereto, nor the consummation by Parent and the Company of the transactions contemplated hereby and thereby (a) will violate any applicable Laws, (b) will require any authorization, consent, approval, exemption or other action by or notice to any Person or any Governmental Authority, except for applicable requirements, if any, of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), state securities and “blue sky” Laws, and the rules and regulations thereunder, and the Department of Insurance, Financial Institutions and Professional Registration (“DIFP”) of the State of Missouri or (c) subject to obtaining the consents in respect of the Seller Agreement and the other consents referred to in Section 2.4 of the Disclosure Schedule, will violate or conflict with, or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or will result in the termination of, or accelerate the performance required by, or result in the creation of any Encumbrance upon any of the assets of the Company

under, any term or provision of the Organizational Documents of Parent or the Company or of any contract, commitment, understanding, arrangement, agreement or restriction of any kind or character to which Parent or the Company is a party or by which Parent or the Company or any of its assets or properties may be bound or affected, except, in the case of clause (c), for such violations, conflicts, breaches, losses, defaults, terminations, cancellations, accelerations or Encumbrances that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.

(b)

The impact of the transactions contemplated in this Agreement, will not result in Company’s or any Company Subsidiary’s inability to operate its business after Closing in a manner consistent with such Company or Company Subsidiary’s respective past practice and ordinary course of business.

2.5.

Financial Statements. The Company has previously made available to Capital true and complete copies of the consolidated financial statements of the Company consisting of (a) balance sheets of the Company as of December 31, 2004, 2005, and 2006, and the related statements of income and cash flows for the years then ended (including the notes contained therein or annexed thereto), which financial statements have been reported on, and are accompanied by, the signed, unqualified opinions of independent auditors for the Company for such years, and (b) an unaudited consolidated balance sheet of the Company as of June 30, 2007 (the “Recent Company Balance Sheet”), and the related unaudited statements of income for the period then ended and for the corresponding period of the prior year (including the notes and schedules contained therein or annexed thereto). All of such financial statements (including all notes and schedules contained therein or annexed thereto) are true, complete and accurate, have been prepared in accordance with GAAP (except, in the case of unaudited statements, for the absence of footnote disclosure) applied on a consistent basis, have been prepared in accordance with the books and records of the Company, and fairly present, in accordance with GAAP, the assets, liabilities and financial position, the results of operations and cash flows of the Company as of the dates and for the years and periods indicated. The books of account and other financial records of the Company are in all material respects complete and correct and do not contain or reflect any material inaccuracies or discrepancies. Attached to Section 2.5of the Disclosure Schedule is a pro forma balance sheet of the Company as of the anticipated Closing Date (i.e., September 30, 2007).

2.6.

Absence of Undisclosed Liabilities or Encumbrances. Except as and to the extent specifically disclosed in Section 2.6 of the Disclosure Schedule or in the Recent Company Balance Sheet, neither the Company nor any Company Subsidiary (a) has any Liabilities other than commercial liabilities and obligations incurred since the date of the Recent Company Balance Sheet in the ordinary course of its or their respective businesses and consistent with its respective past practice and none of which has or will have, individually or in the aggregate, a Company Material Adverse Effect, (b) has assets subject to any Encumbrance other than (i) Encumbrances shown on the Recent Company Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (ii) Encumbrances incurred in connection with the purchase of property or assets after the date of the Recent Company Balance Sheet (such Encumbrances being limited

to the property or assets so acquired), with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (iii) Encumbrances for current taxes no