EXHIBIT
10.1.38
FIRST AMENDMENT TO AMENDED AND RESTATED SENIOR LOAN AND SECURITY
AGREEMENT
THIS FIRST AMENDMENT TO SENIOR LOAN AND SECURITY AGREEMENT (“First
Amendment”), dated as of November 12, 2004, by and among (1)(a) FRIEDMAN,
BILLINGS, XXXXXX GROUP, INC., a Virginia corporation, as a senior lender
(“FBR”), and (b) STANDARD AMERICAN INSURANCE LIMITED, a Bermuda company, as a
senior lender (“SAIL,” and together with FBR, the “Senior Lenders”); and (2)
SPECIALTY UNDERWRITERS’ ALLIANCE, INC., a Delaware corporation, as the borrower
(the “Borrower”); and (3) acknowledged and agreed to by each of Xxxxxxxx Xxxxx,
Xxxxx Xxxxxx, Xxxxxxx Xxxxx and Xxxx Xxxxxxxx, each an individual, as the
subordinated lenders (each, a “Subordinated Lender”), recites and provides as
follows:
WHEREAS, the Senior Lenders, the Borrower and the Subordinated Lenders are
parties to an Amended and Restated Senior Loan and Security Agreement, dated as
of July 23, 2004 (the “Original Agreement”);
WHEREAS, the closing date for the Borrower’s Qualified Equity Offering is
imminent, and in order to facilitate the closing of such Qualified Equity
Offering, which is to the benefit of all parties to the Original Agreement, the
Borrower has requested the Senior Lenders to extend the Maturity Date to
December 15, 2004, to relinquish their Warrants, and has requested FBR to
accept the final payment on the FBR Note in stock of the Borrower rather than
in cash, at the request of the;
WHEREAS, the Senior Lenders have agreed to these proposed
modifications, on the terms and subject to the conditions set forth
herein, which include certain amendments to the terms of the Original
Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and promises made herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound hereby, the parties hereto agree as follows:
AGREEMENT:
1. Capitalized Terms. Capitalized terms used herein but not
defined herein shall have the respective meanings set forth in the Original
Agreement.
2. Relinquishment of Warrants. Upon completion of an initial public offering of
equity securities by the Borrower pursuant to an effective
registration statement under the Securities Act in which the proceeds
to the Borrower are not less than $100,000,000 before deduction of
underwriting commissions and other offering expenses, the Warrants
issued to each Senior Lender shall automatically and without the need
for any further action be null and void.
3. Extension of Maturity Date. Clause (i) in the definition of
“Maturity Date” is deleted and is restated to read “(i) December 15, 2004, as
the same may be extended pursuant to the terms hereof.”
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4. Payment of FBR Note in Borrower Stock. The following is hereby
added to the Loan Agreement as a new Section 2.05(c):
(c)
Option to Pay Obligations to FBR and SAIL in Common Stock. If the
Maturity Date occurs on the closing date for a Qualified Equity Offering,
then the Borrower shall pay all Obligations owed to each
of FBR and SAIL by delivering to each of FBR and SAIL a number of shares of Common Stock equal to the number of shares that
could be purchased in the Qualified Equity Offering (assuming no
underwriter fees, placement agent fees or other similar fees are payable
in connection with such offering) for the total dollar amount of the
Obligations owing to each of FBR and SAIL as a Senior Lenders.
5. Counterparts. This First Amendment may be executed in any
number of counterparts, each of which, when executed and delivered, shall be
deemed an original and all of which counterparts, taken together, shall
constitute but one and the same instrument with the same force and effect as if
the signatures of all of the parties were on a single counterpart.
6. Entire Agreement; Governing Law. This First Amendment and the
Original Agreement constitute the entire agreement of the parties with respect
to the subject matter hereof. To the extent any representation, warranty,
covenant or other agreement in the Original Agreement is inconsistent with any
representation, warranty, covenant or other agreement contained in this First
Amendment, the provisions of this First Amendment shall control. THIS FIRST
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS AND DECISIONS OF THE COMMONWEALTH OF VIRGINIA (WITHOUT
REFERENCE TO CONFLICT OF LAWS PRINCIPLES).
7. Ratification of Original Agreement. Except with respect to the
matters expressly contemplated hereby, the Original Agreement shall continue in
full force and effect in accordance with the provisions thereof, as in
existence on the date hereof.
8. No Waiver. This First Amendment does not constitute a waiver of
any Default or Event of Default that currently exists or that may arise in the
future (other than nonpayment of the Senior Secured Notes and all related
Obligations on October 31, 2004, the Maturity Date prior to the extension
thereof pursuant to this First Amendment), nor is it a waiver by either Senior
Lender of any right or remedy it has resulting from any Default or Event of
Default that currently exists or that may arise in the future. This First
Amendment also does not constitute an agreement by either Senior Lender to
consent to a breach of, or to waive, any provision of the Original Agreement,
this First Amendment or any other Significant Document in the future.
9. Costs and Expenses. All costs and expenses incurred by the
Senior Lenders in connection with the negotiation, execution and enforcement of
this First Amendment (including, without limitation, reasonable legal fees and
expenses incurred by the Senior Lenders) shall be borne and paid by the
Borrower, and each such item shall be paid by the Borrower promptly upon
presentation to the Borrower of an invoice therefor.
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10. Release of Claims. The Borrower and all of its successors and
assigns, each hereby forever releases, discharges and acquits the Senior
Lenders and all of the Senior Lenders’ respective parents, subsidiaries,
affiliates and shareholders, and all of the Senior Lenders’ and such other
entities’ respective affiliates, directors, officers, employees, agents,
subsidiaries and shareholders, and their respective successors, heirs and
assigns, and each of them, from and of any and all claims, demands,
obligations, liabilities, indebtedness, breaches of contract, breaches of duty
and any relationship, acts, omissions, misfeasance, malfeasance, cause or
causes of action, debts, sums of money, accounts, compensation, contracts,
controversies, promises, damages, costs, losses and expenses, of every type,
kind, nature, description or character, and irrespective of how, why, or by
reason of what facts, whether heretofore or now existing or arising, or which
could, might or may be claimed now to exist or arise, of whatever kind or
nature, whether known or unknown, suspected or unsuspected, liquidated or
unliquidated, each as though fully set forth herein at length and which in any
way arise out of, or are connected with or relate to the Original Agreement,
this First Amendment or any other Significant Document.
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IN WITNESS WHEREOF, each of the Senior Lenders, the Borrower and each of
the Subordinated Lenders has caused this First Amendment to Amended and
Restated Senior Loan and Security Agreement to be executed by its duly
authorized officer, as of the date first above written.
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FRIEDMAN, BILLINGS, XXXXXX GROUP, INC., Senior Lender |
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SPECIALTY UNDERWRITERS’ ALLIANCE, INC., Borrower |
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By: |
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/s/ Xxxxxx X. Xxxxxxx |
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By: |
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/s/ Xxxxxxxx Xxxxx |
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Name: |
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Xxxxxx X. Xxxxxxx |
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Name: |
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Xxxxxxxx Xxxxx |
Title: |
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Managing Director |
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Title: |
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President |
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STANDARD AMERICAN INSURANCE LIMITED, Senior Lender |
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By: |
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/s/ Xxxxx Xxxxxxxxx |
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Name: |
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Xxxxx Xxxxxxxxx |
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Title: |
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Director |
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Acknowledged and Agreed by
Subordinated Lenders: |
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/s/ Xxxxxxxx Xxxxx |
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/s/ Xxxxxxx Xxxxx |
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Xxxxxxxx Xxxxx |
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Xxxxxxx Xxxxx |
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/s/ Xxxxx Xxxxxx |
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/s/ Xxxx Xxxxxxxx |
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Xxxxx Xxxxxx |
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Xxxx Xxxxxxxx |
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/s/ Xxxxxxx Xxxxx |
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Xxxxxxx Xxxxx |
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/s/ Xxxx Xxxxxxxx |
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Xxxx Xxxxxxxx |
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[Signature Page to First Amendment to Amended and Restated Senior Loan and Security
Agreement]
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