AMENDMENT TO COMMERCIAL LOAN AGREEMENT (INCLUDING JOINDER OF ADDITIONAL BORROWERS)
Exhibit 10.21
AMENDMENT TO COMMERCIAL LOAN AGREEMENT
(INCLUDING JOINDER OF ADDITIONAL BORROWERS)
(INCLUDING JOINDER OF ADDITIONAL BORROWERS)
THIS AMENDMENT dated as of September 27, 2007 is made to and a part of the Commercial Loan
Agreement and Addendum thereto (the “CLA Addendum”) dated March 30, 2006 (the “Loan Agreement”) by
and between BROOKE CREDIT CORPORATION (“LENDER”) and SUNCOAST HOLDINGS, INC., a Delaware
corporation (“SH”), BRANDYWINE INSURANCE HOLDINGS, INC., a Delaware corporation (“BIH”), and
PATRIOT RISK SERVICES, INC., a Delaware corporation (“PRS”).
WHEREAS, SH, BIH and PRS have collectively executed the Loan Agreement and related “Loan
Documents” (as defined in the Loan Agreement) dated March 30, 2006, including, but not limited to,
a Commercial Promissory Note (the “Original Note”), Guaranty of Xxxxxx X. Xxxxxxx (the
“Guaranty”), Commercial Security Agreement (the “Security Agreement”) and Stock Pledge Agreement
(the “Pledge Agreement”), together with a Consent dated August 2, 2007;
WHEREAS, the Loan Agreement and other Loan Documents (i) name the Borrower as SunCoast
Holdings, Inc., Brandywine Insurance Holdings, Inc. and Patriot Risk Services, Inc. and (ii) refer
to a principal loan amount of $8,652,000.00;
WHEREAS, the parties desire to (i) join SunCoast Capital, Inc., Patriot Risk Management, Inc.
and Patriot Risk Management of Florida, Inc. as additional borrowers (hereinafter the “Additional
Borrowers” and, together with SH, BIH and PRS, the “Borrower”) and (ii) have Lender make an
incremental $5,768,000.00 term loan to the Borrower and thereby increase the principal amount of
the loan outstanding under the Loan Documents from $8,033,172.47 to $13,801,172.47; and
WHEREAS, it is also the intention of the parties (i) to confirm and continue the security
interests originally granted to Lender by SH, BIH and PRS and (ii) for additional security
interests to be granted by the Additional Borrowers to Lender.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the sufficiency and receipt of which are
acknowledged, it is agreed as follows:
1. Capitalized terms used but not defined herein are used with the meanings assigned
to them in the Loan Documents.
2. The term “Borrower”, as defined in the Loan Agreement and each other Loan
Document, is hereby amended to mean and include “SunCoast Holdings, Inc., Brandywine
Insurance Holdings, Inc., SunCoast Capital, Inc., Patriot Risk Services, Inc., Patriot Risk
Management, Inc. and Patriot Risk Management of Florida, Inc.”, and each reference in the Loan
Agreement and the other Loan Documents shall be deemed a reference to each of the foregoing
entities individually and collectively and jointly and severally.
3. Borrower hereby acknowledges receipt on the date hereof of $5,768,000.00,
representing the proceeds of the incremental term loan referred to above (such incremental
term
loan being evidenced by a Commercial Promissory Note dated the date hereof and executed by
Borrower (the “New Note”)). Borrower represents, warrants and agrees that all such proceeds
shall be used solely for the following purposes: (i) $5,000,000.00 for a capital injection
from SH
to GIC; (ii) $500,000.00 to enable Borrower to purchase a Borrower’s Assistance Plan from and
in favor of Brooke Capital Advisors, Inc., a Delaware corporation (“BCA”), pursuant to such
documentation as BCA may require in its sole and absolute discretion; (iii) $168,000.00 for
the
payment of all loan, origination and other transaction-related fees that are payable by
Borrower to
Lender; and (iv) $100,000 to National Capital Advisors for the payment of consulting fees.
4. The sections of the Loan Agreement entitled “Borrower Name and Address,”
“Loan Description,” “Loan Structure,” “Fees” and “Loan Proceeds” are hereby deemed to be
amended to incorporate by reference the terms of the incremental term loan, the New Note and
the use of proceeds thereof as set forth in this Amendment and the New Note, and the
“Borrower’s Name and Address” section of the Original Note is hereby deemed to be amended to
include the names of SunCoast Capital, Inc., Patriot Risk Management, Inc. and Patriot Risk
Management of Florida, Inc.
5. Paragraph 11 of the CLA Addendum is amended and restated in its entirety to
read as follows:
“11. PREPAYMENT PREMIUM. Any promissory note(s) executed by Borrower
which evidence the Loan(s) shall provide for a prepayment premium equal to
the Prepayment Percentage (as defined herein) of the principal loan balance
Borrower prepays. The “Prepayment Percentage” shall be 10% from
March 30, 2006 through March 29, 2007, 8% from March 30, 2007 through March
29, 2008, and 6% from March 30, 2008 through March 29, 2009. This
prepayment premium shall not apply after March 30, 2009.”
6. Paragraph 8(g) of the CLA Addendum is amended to add the following at the end
of the clause after the words “attached hereto as Exhibit II”:
“within thirty (30) days after notice from the Lender of such
amendment or deviation; provided, however, no Event of Default shall be
deemed to have occurred under this paragraph 8(g) if any such amendment or
deviation is reasonably capable of being cured and same is in fact cured
within 45 days after notice from Lender.”
7. The enumerated events constituting a “Default” as set forth in the Original Note,
the New Note, the Security Agreement and the New Security Agreements (as defined below)
shall be superseded and replaced by the enumerated “Events of Default” set forth in paragraph 8
of the CLA Addendum, except for clause (4) of said Notes stating “any other creditor of mine
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attempts to collect any debt I owe him through court proceedings”, which Default
provision shall remain in effect and not be superseded.
8. Each of SunCoast Capital, Inc., Patriot Risk Management, Inc. and Patriot Risk
Management of Florida, Inc., as Additional Borrowers, shall as of the date hereof,
together with
SH, BIH and PRS, become party to the Loan Agreement, the Original Note, the New
Note, the
new Commercial Security Agreements dated the date hereof (the “New Security
Agreements”)
and the other Loan Documents (to the extent applicable) as “Borrower”, with the
same effect as
if each such Additional Borrower had originally executed each such Loan Document.
Further,
each such Additional Borrower hereby agrees that from the date hereof until payment
in full of
the principal of and interest on the Loans made under the Loan Documents and the
performance
of all of its other obligations thereunder, it (i) shall assume, perform, comply
with and be bound
by each of the covenants, obligations, conditions and other provisions of the Loan
Agreement
and other Loan Documents applicable to “Borrower” thereunder, including, but not
limited to,
the joint and several obligation to pay amounts owing on the Original Note, and
(ii) hereby grants
to Lender a security interest in its property as described in the New Security
Agreements to
secure the payment and performance of the Loans and all of such Additional
Borrower’s other
obligations and liabilities to Lender. Without limiting the generality of the
foregoing, each
Additional Borrower hereby represents and warrants that (a) it has received a true
and correct
copy of the Loan Documents as in effect on the date hereof, (b) the representations
and
warranties of Borrower contained in the Loan Documents are hereby made by such
Additional
Borrower as the date hereof and are true and correct, (c) the Loan Agreement, the
Original Note,
the New Note, the New Security Agreements and the other Loan Documents constitute
the legal,
valid and binding obligations of such Additional Borrower enforceable (jointly and
severally)
against such Additional Borrower in accordance with their respective terms. Each
Borrower
entity hereby represents and warrants that no Default or Event of Default under the
Loan
Documents has occurred and is continuing.
9. This Amendment may be affixed to each and every Loan Document as evidence
of the amendment thereof in accordance with the above terms; provided, that
failure to so affix
this Amendment shall not affect the validity or enforceability thereof.
10. Unless specifically amended hereby, all provisions, terms and conditions in the
Loan Agreement and the other Loan Documents shall otherwise remain unaltered and in
full
force and effect, and the respective terms, conditions and covenants thereof are
hereby ratified
and confirmed in all respects as originally executed. Upon effectiveness of this Amendment,
all
references to the Loan Agreement or other Loan Documents shall be a reference to the
Loan Agreement and Loan Documents as amended hereby, and all references in the Loan
Documents to “commercial promissory note,” “promissory note” or “note” shall be deemed
to refer to each and every promissory note at any time issued by any Borrower entity to
Lender, including the Original Note and the New Note, as from time to time further
amended or replaced.
11. This Amendment shall be construed and governed by the laws of the State of
Kansas, except to the extent that the laws of a jurisdiction other than the
State of Kansas are
required to govern any enforcement or foreclosure action with respect to any of the
Collateral.
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12. This Amendment may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date
first above written.
BORROWER: | LENDER: | |||||||
SUNCOAST HOLDINGS, INC., | BROOKE CREDIT CORPORATION, | |||||||
a Delaware corporation | a Delaware corporation | |||||||
By:
|
/s/ Xxxxxx X. Xxxxxxx | By: | /s/ Xxxxxxx X. Xxxxx | |||||
Name:
|
Name: | |||||||
Title:
|
President and Chief Executive Officer | Title: | President & CEO | |||||
BRANDYWINE INSURANCE | ||||||||
HOLDINGS, INC., | ||||||||
a Delaware corporation | ||||||||
By:
|
/s/ Xxxxxx X. Xxxxxxx | |||||||
Name:
|
||||||||
Title:
|
President and Chief Executive Officer | |||||||
SUNCOAST CAPITAL, INC., | ||||||||
a Delaware corporation | ||||||||
By:
|
/s/ Xxxxxx X. Xxxxxxx | |||||||
Name:
|
Xxxxxx X. Xxxxxxx | |||||||
Title:
|
President and Chief Executive Officer | |||||||
PATRIOT RISK MANAGEMENT, INC., | ||||||||
a Delaware corporation | ||||||||
By:
|
/s/ Xxxxxx X. Xxxxxxx | |||||||
Name:
|
Xxxxxx X. Xxxxxxx | |||||||
Title:
|
Chairman & EVP | |||||||
PATRIOT RISK SERVICES, INC., | ||||||||
a Delaware corporation | ||||||||
By:
|
/s/ Xxxxxx X. Xxxxxxx | |||||||
Name:
|
Xxxxxx X. Xxxxxxx | |||||||
Title:
|
Chairman & EVP |
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PATRIOT RISK MANAGEMENT OF FLORIDA, INC. | ||||
a Delaware corporation | ||||
By:
|
/s/ Xxxxxx X. Xxxxxxx | |||
Name:
|
||||
Title:
|
Chairman & EVP |
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CONSENT OF GUARANTOR
The undersigned, as guarantor of all debt and obligations of Borrower to Lender under the Guaranty,
hereby acknowledges and consents to the above-referenced Amendment.
/s/ Xxxxxx X. Xxxxxxx | ||
Xxxxxx X.Xxxxxxx, individually |
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