THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED
(THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT
BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN
EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT
OR ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.
THE
WARRANT EVIDENCED HEREBY IS NOT TRANSFERABLE.
March 2, 2005
FIRST AMERICAN CAPITAL CORPORATION
WARRANT
FIRST AMERICAN
CAPITAL CORPORATION, a Kansas corporation (the "Company"),
for value received, hereby certifies that
Brooke Corporation, a Kansas
corporation (the "Holder"), is entitled to
purchase from the Company, at any
time or from time to time during the period
specified in Section 2 hereof, up to
50,000 fully paid and nonassessable shares
of Common Stock, par value $0.10, of
the Company (the "Common Stock"), at an
exercise price equal to $3.35 per share
(the "Exercise Price"), subject to the
other terms herein. As used herein, the
term "Warrant Shares" means the shares of
Common Stock issuable upon exercise of
this Warrant (the "Warrant").
1. MANNER OF
EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this
Warrant may be exercised by the Holder,
in whole or in part, by the surrender of
this Warrant, together with a completed
exercise agreement in the form attached
hereto (the "Exercise Agreement"), to
the Company during normal business hours on
any business day at the Company's
principal executive offices (or such other
office or agency of the Company as it
may designate by notice to the Holder), and
upon payment to the Company in cash,
by certified or official bank check or by
wire transfer to an account specified
by the Company of the Exercise Price for
the Warrant Shares specified in the
Exercise Agreement. The Warrant Shares so
purchased shall be deemed to be issued
to the Holder, as the record owner of such
shares, as of the close of business
on the date on which this Warrant shall
have been surrendered, the completed
Exercise Agreement shall have been
delivered, and payment shall have been made
for such shares as set forth above.
Certificates for the Warrant Shares so
purchased, representing the aggregate
number of shares specified in the Exercise
Agreement, shall be delivered to the Holder
within five business days after this
Warrant shall have been so exercised. All
certificates representing Warrant
Shares that have not been registered with
the Securities and Exchange Commission
shall bear the following legend, in
addition to any other legend required by
applicable law or otherwise:
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"),
OR UNDER
ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT
OR ANY APPLICABLE STATE SECURITY LAWS OR AN EXEMPTION
THEREFROM.
The certificates so delivered shall be in
such denominations as may be requested
by the Holder and shall be registered in
the name of the Holder. In the event
this Warrant is exercised in part, the
Company shall also deliver a new Warrant
to the Holder, which Warrant shall be
identical to this Warrant, except that the
number of Warrant Shares exercisable
therefor shall be decreased by the number
of Warrant Shares so purchased.
2. PERIOD OF
EXERCISE. This Warrant is exercisable at any time during the
following periods (the "Exercise
Period"):
(A) at or after the
earlier of:
(1) March 2, 2012;
or
(2) the time that is
immediately prior to the consummation of a
Change of Control Transaction (as defined in Section 3(d)
below) so long as the Company has delivered written notice
of such Change of Control Transaction as provided by the
Company to Holder pursuant to Section 3(d) below; and
(B) before the earlier
of:
(1) 5:00 p.m. central
time on March 2, 2015;
(2) the date that is
10 days after Holder receives notice by the
Company that Holder is in material breach of the covenants
set forth in Article III of that certain Stock Repurchase
Agreement, dated March 2, 2005, if such breach is not cured
in full to the reasonable satisfaction of the Company within
such period; or
(3) the consummation
of a Change of Control Transaction.
3. CERTAIN
AGREEMENTS OF THE COMPANY. The Company covenants as follows:
(A) SHARES TO BE FULLY PAID. All Warrant Shares shall, upon
issuance
in accordance with the terms of this
Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes,
liens, and charges with respect to the
issue thereof.
-2-
<PAGE>
(B) RESERVATION OF SHARES. During the Exercise Period, the
Company
shall at all times have authorized, and
reserved for the purpose of issuance
upon exercise of this Warrant, a sufficient
number of shares of Common Stock to
provide for the exercise of this
Warrant.
(C) CERTAIN ACTIONS PROHIBITED. The Company shall not, by amendment
of
its articles of incorporation or through
any reorganization, transfer of assets,
consolidation, merger, dissolution, issue
or sale of securities, or any other
voluntary action, avoid or seek to avoid
the observance or performance of any of
the terms to be observed or performed by it
hereunder, but shall at all times in
good faith assist in the carrying out of
all the provisions of this Warrant and
in the taking of all such action as may
reasonably be requested by the holder of
this Warrant in order to protect the
exercise privilege of the holder of this
Warrant against impairment, consistent with
the tenor and purpose of this
Warrant. Without limiting the generality of
the foregoing, the Company shall
take all such actions as may be necessary
or appropriate in order that the
Company may validly and legally issue fully
paid and nonassessable shares of
Common Stock upon the exercise of this
Warrant.
(D) CHANGE OF CONTROL TRANSACTION. At least 20 calendar days prior
to
the consummation of a Change of Control
Transaction, the Company agrees to give
Holder written notice of such Change of
Control Transaction. As used herein, the
term "Change of Control Transact
