Exhibit 10.13
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BORROWER NAME AND ADDRESS |
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LENDER NAME AND ADDRESS |
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LOAN DESCRIPTION |
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Sun Coast Holdings,
Inc., Brandywine Insurance
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Brooks Credit Corporation |
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Holdings, Inc., and
Patriot Risk services, Inc.
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10050 Grandview Dr., Ste. #600 |
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Number 5137 |
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401 East Las Olas
Blvd. Suite 1540
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Overland Part, KS 66210 |
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Amount 8,652,000.00 |
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Ft. Laudrerdale, FL
33301
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Date 03-30-2006 |
o Refer to the attached Signature
Addendum, incorporated herein, for additional Borrowers and their
signatures.
COMMERCIAL LOAN AGREEMENT
LOAN
STRUCTURE. This Commercial Loan Agreement (Agreement) contemplates
þ a single advance term Loan
o a multiple advance draw Loan
o a revolving multiple advance draw
Loan. The principal balance will not exceed $5,652,000.00. Borrower
will pay down a revolving draw Loan’s outstanding Principal
in $
(Pay Down Balance)
(Time Period). This Loan is for o
agricultural þ business
purposes.
o Borrower may not voluntarily prepay
the Loan in full at any time. þ
Borrower may prepay the Loan under the following terms and
conditions (Any partial prepayment will not excuse any later
scheduled payments until the Loan is paid in full) at any time
subject to the payment of the prepayment premium
hereinafter described,
þ LATE CHARGES. If a payment is
made more than 5 days after it is due, Borrower will pay a
late charge of 5.000% of the payment amount.
FEES.
Borrower agrees to pay the following fees in connection with this
Loan at closing or as otherwise requested by Lender: BOC
Borrower’s Assistance Plan
$750,000.000
BCC fees and DB Indemnity $252,000
National Capital Advisors $150,000
REQUESTS
FOR ADVANCES. Borrower authorizes Lender to honor a request for an
advance from Borrower or any person authorized by Borrower. The
requests for an advance must be in writing, by telephone, or any
other manner agreed upon by Borrower and Lender, and must specify
the requested amount and date and be accompanied with any
agreements, document, and instruments that Lender requires for the
Loan. Lender will make same day advances, on any day that Lender is
open for business, when the request is received before
(Advance Cut-Off Time). Lender will disburse the advance into
Borrower’s demand deposit account (if any), account number
or in any other agreed upon manner. All advances will be made in
United States dollars.
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These requests must be made by at least
(Number Required To Draw) persons, acting together, of those
persons authorized to act on Borrower’s behalf. |
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Advances will be made in the amount of at least $
(Minimum Amount Of Advance). |
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Advances will be made no more frequently than
(Minimum Frequency Of Advance). |
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Discretionary Advances. Lender will make all loan advances at
Lender’s sole discretion. |
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Obligatory Advances. Lender will make all Loan advances subject
to this Agreement’s terms and conditions. |
FINANCIAL INFORMATION. Borrower will prepare and maintain
Borrower’s financial records using consistently applied
generally accepted accounting principles then in effect. Borrower
will provide Lender with financial information in a form acceptable
to Lender and under the following terms.
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Frequency. Annually, Borrower will provide to Lender
Borrower’s financial statements, tax returns, annual internal
audit reports or those prepared by independent accountants within
120 days after the close of each fiscal year. Any annual financial
statements that Borrower provides will be þ audited statements.
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reviewed statements, o compiled statements. þ Borrower will provide Lender with
interim financial reports on a Quarterly (Monthly, Quarterly)
basis, and within 45 days after the close of this business
period. Interim financial statements will be o audited þ reviewed o
compiled statements. |
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Requested Information. Borrower will provide Lender with any
other Information about Borrower’s operations, financial
affairs and conditions within 15 days after Lender’s
request. |
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Leverage Ratio. Borrower will
maintain at all times a ratio of total liabilities to tangible net
worth, determined under consistently applied generally accepted
accounting principles, of
(Total Liabilities to Tangible Net Worth Ratio) or less. |
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Minimum Tangible Net Worth. Borrower
will maintain at all times a total tangible net worth, determined
under consistently applied generally accepted accounting
principles, of $
(Minimum Tangible Net Worth) or more. Tangible net worth is the
amount by which total assets exceed total liabilities. For
determining tangible net worth, total assets will exclude all
intangible assets, including without limitation goodwill, patents,
trademarks, trade names, copyrights, and franchises, and will also
exclude any accounts receivable that do not provide for a repayment
schedule. |
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Minimum Currant Ratio. Borrower will
maintain at all times a ratio of current assets to current
liabilities, determined under consistently applied generally
accepted accounting principles of
(Minimum Current Ratio) or more. |
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Minimum Working-Capital. Borrower
will maintain at all times a working capital, determined under
consistently applied generally accepted accounting principles by
subtracting current liabilities from current assets, of $
(Minimum Working Capital) or more. For this determination, current
assets exclude
(Excluded Current Assets). Likewise, current liabilities include
(1) all obligations payable on demand or within one year after
the date on which the determination is made, and (2) final
maturities and sinking fund payments required to be made within one
year after the date on which the determination is made, but exclude
all liabilities or obligations that Borrower may renew or extend to
a date more than one year from the date of this determination. |
ATTACHMENTS. The following documents are incorporated by reference
into this Agreement: o Asset Based
Financing Agreement addendum dated
o Commercial Security Agreement
addendum dated
þ Other Addendum hereto dated
3/30/2006
ADDITIONAL TERMS:
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ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE
LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO
THE CREDIT AGREEMENT.
TO PROTECT YOU (BORROWER) AND US (LENDER) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE
COMPLETEE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT. BY SIGNING
THIS AGREEMENT, THE PARTIES AFFIRM THAT NO UNDERWRITTEN ORAL
AGREEMENT EXISTS BETWEEN THEM. |
SIGNATURES, By signing under seal, I agree to all the term and
condition beginning on page 1 through the bottom of page 2 this
Agreement. Borrower also acknowledges receipt of a copy of this
Agreement.
BORROWER:
SonCoast
Holdings, Inc., Brandywine Insurance Holdings, Inc. and
Patriot Risk Services, Inc.
Entity Name
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| /S/ Steven M. Mariano
CEO |
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(Seal) |
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/S/ Steven
(illegible) |
(Seal) |
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Signature
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Signature (illegible) |
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Steven
(illegible)
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| /S/ Steven Mariano |
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(Seal) |
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(Seal) |
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Signature
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Signature |
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Steven Mariano
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LENDER
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| Brooke Credit
Corporation |
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Entity Name
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(Seal) |
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Signature
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Michael
Lowry,Presidant
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COMMERCIAL LOAN
AGREEMENT, to be used with form Comm- NOTE EXPERTS @ 1999,2001
Bankers Systems, Inc., St. Cloud MN. (illegible)
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NOT TO BE USED FOR LOANS SUBJECTS TO
CONSUMER LENDING LAWS |
DEFINITIONS. In this Agreement, the following terms have the
following meanings,
Accounting Terms. Accounting terms that are not specifically
defined will have their customary meanings under consistently
applied generally accepted accounting principles.
Loan. Loan refers in all advances made under the terms of
this Agreement.
Loan
Documents. Loan Documents include this Agreement and all
documents prepared pursuant to the terms of this Agreement
Including all present and future promissory notes (Notes), security
instruments, guaranties, and supporting documentation as modified,
amended or supplemented.
Property. Property is any collateral, real, personal or
intangible, that secures Borrower’s performance of the
obligations of this Agreement.
ADVANCES. To the extent permitted by law, Borrower will
Indemnify Lender and hold Lender harmless for reliance on any
request for advance that Lender reasonably believes to be genuine.
Lender’s records are conclusive evidence as to the number and
amount of advances and the Loan’s unpaid principal and
interest, If any advance results in an overadvance (when the total
amount of the Loan exceeds the principal balance) Borrower will pay
the overadvance, as requested by Lender. Regarding Borrower’s
demand deposit account(s) with Lender, Lender may, at its option,
consider presentation for payment of a check or other charge
exceeding available funds as a request for an advance under this
Agreement. Any such payment by Lender will constitute an advance on
the Loan.
CONDITIONS. Borrower will satisfy all of the following
conditions before Lender makes any advances under this Agreement.
If this Agreement provides for discretionary advances, satisfaction
of these conditions does not commit Lender to making
advances.
No
Default. There has not been a default under the Loan Documents
nor would a default result from making the advance.
Information. Borrower has provided all required documents,
information, certifications and warranties, all properly executed
on forms acceptable to Lender.
Inspections. Borrower has accommodated, to Lender’s
satisfaction, all inspections.
Conditions and Covenants. Borrower has performed and
complied with all conditions required for an advance and all
covenants in the Loan Documents
Warranties and Representations. The warranties and
representations contained in this Agreement are true and correct at
the time of making the advance.
Financial Statements. Borrower’s most recently
delivered financial statements and reports are current, complete,
true and accurate in ail material respects and fairly represent
Borrower’s financial condition.
Bankruptcy Proceedings. No proceeding under the United
Suites Bankruptcy Code has been commenced by or against Borrower or
any of Borrower’s affiliates.
WARRANTIES AND REPRESENTATIONS. Borrower makes these
warranties and representations which will continue as long as this
Agreement is in effect.
Power. Borrower is duly organized, validly existing and in
good standing in all jurisdictions in which Borrower operates.
Borrower has the power and authority to enter into this transaction
and to carry on its business or activity as it is now being
conducted. All persons who are required by applicable law and the
governing documents of Borrower have executed and delivered to
Lender this Agreement and other Loan Documents.
Authority. The execution, delivery and performance of this
Agreement and the obligation evidenced by the Loan Documents are
within Borrower’s duly authorized powers, has received all
necessary governmental approval, will not violate any provision of
law or order of court or governmental agency, and will not violate
any agreement to which Borrower is a party or to which Borrower or
Borrower’s property is subject.
Name
and Place of Business. Other than previously disclosed in
writing to Lender, Borrower has not changed its name or principal
place of business within the last ten years and has not used any
other trade or fictitious name. Without Lender’s prior
written consent. Borrower will not use any other name and will
preserve Borrower’s existing name, trade names and
franchises.
No
Other Liens. Borrower owns or leases all property that is
required for its business and except as disclosed, the property is
free and clear of all liens, security interests, encumbrances and
other adverse interests.
Compliance With Laws. Borrower is not violating any laws,
regulations, rules, orders, judgments or decrees applicable to
Borrower or its property, except as disclosed to Lender.
Financial Statements. Borrower represents and warrants that
all financial statements Borrower provides fairly represent
Borrower’s financial condition for the stated periods, are
current, complete, true and accurate in all material respects,
include all direct or contingent liabilities, and that there has
been no material adverse change in Borrower’s financial
condition, operations or business since the date the financial
information was prepared.
COVENANTS. Until the Loan and all related debts, liabilities
and obligations under the Loan Documents are paid and discharged,
Borrower will comply with the following terms, unless Lender waives
compliance in writing.
Inspection and Disclosure. Borrower will allow Leader or its
agents to enter any of Borrower’s premises during mutually
agreed upon times, to do the following: (1) inspect, audit,
review and obtain copies from Borrower’s books, records,
orders, receipts, and other business related data; (2) discuss
Borrower’s finances and. business with anyone who claims to
be Borrower’s creditor; (3) inspect Borrower’s
Property, audit for the use and disposition of the Property’s
proceeds, or do whatever Lender decides is necessary to preserve
and protect the Property and Lender’s interest in the
Property, As long as this Agreement is in effect, Borrower will
direct all of Borrower’s accountants and auditors to permit
Lender to examine and make copies of Borrower’s records in
their possession, and to disclose to Lender any other information
that they know about Borrower’s financial condition and
business operations. Lender may provide Lender’s regulator
with required information about Borrower’s financial
condition, operation and business or that of Borrower’s
parent, subsidiaries or affiliates.
Business Requirements. Borrower will preserve and maintain
its present existence and good standing in jurisdictions where
Borrower is organized and operates. Borrower will continue its
business or activities as presently conducted, by obtaining
licenses, permits and bonds where needed. Borrower will obtain
Lender’s prior written consent before ceasing business or
engaging in any line of business that is materially different from
its present business.
Compliance with Laws. Borrower will not violate any laws,
regulations, rules, orders, judgments or decrees applicable to
Borrower or Borrower’s property, except for those which
Borrower challenges in good faith through proper proceedings after
providing adequate reserves to fully pay the claim and its appeal
should Borrower lose. On request, Borrower will provide Lender with
written evidence that Borrower has fully and timely paid taxes,
assessments and other governmental charges levied or imposed on
Borrower and its income, profits and property. Borrower will
adequately provide for the payment of taxes, assessments and other
charges that may have accrued’ but are not yet due and
payable.
New
Organizations. Borrower will obtain Lender’s written
consent before organizing, merging into, or consolidating with an
entity; acquiring all or substantially all of the assets of
another; or materially changing legal structure, management,
ownership or financial condition.
Other
Liabilities. Borrower will not incur, assume or permit any debt
evidenced by notes, bonds or similar obligations except debt in
existence on the date of this Agreement and fully disclosed to
Lender; debt subordinated in payment to Lender on terms acceptable
to Lender; accounts payable incurred in the ordinary course of
business and paid under customary trade terms or contested in good
faith with reserves satisfactory to Lender; or as otherwise agreed
to by Lender.
Notice. Borrower will promptly notify Lender of any material
change in financial condition, a default under the Loan Documents,
or a default under any agreement with a third party which
materially and adversely affects Borrower’s property,
operations or financial condition.
Dispose of No Assets. Without Lender’s prior written
consent. Borrower will not sell, lease, assign, or otherwise
distribute all or substantially all of its assets.
Insurance. Borrower will obtain and maintain insurance with
Insurers in amounts and coverages that are acceptable to Lender and
customary with industry practice. This may Include without
limitation credit insurance, insurance policies for public
liability, fire, hazard and extended risk, workers compensation,
and, at Lender’s request, business interruption and/or rent
loss insurance. Borrower may obtain insurance from anyone Borrower
wants that is acceptable to Lender, Borrower’s choice of
insurance provider will not affect the credit decision or Interest
rate. At Lender’s request, Borrower will deliver to Lender
certified copies of ail of these insurance policies, binders or
certificates. Borrower will obtain and maintain a mortgagee or loss
payee endorsement for Lender when these endorsements are available.
Borrower will require all insurance policies to provide at least
10 days prior Written notice to Lender of cancellation or
modification, Borrower consents to Lender using or disclosing
information relative to any contract of insurance required for the
Loan for the purpose of replacing this insurance, Borrower also
authorizes its insurer and Lender to exchange all relevant
Information related to any contract of Insurance executed as
required by any Loan Documents.
Property Maintenance. Borrower will keep property that is
necessary or useful in its business in good working condition by
making all needed repairs, replacements and improvements and by
making payments due on the property.
DEFAULT. If the Loan is payable on demand, Lender may demand
payment at any time whether or not any of the following events have
occurred. Borrower will be in default if any one or more of the
following occur: (1) Borrower fails to make a payment in full
when due. (2) Borrower makes an assignment for the benefit of
creditors or becomes insolvent, either because Borrower’s
liabilities exceed its assets or Borrower is unable to pay debts as
they become due; or Borrower petitions for protection under any
bankruptcy, insolvency or debtor relief laws, or is the subject of
such a petition or action and fails to have the petition or action
dismissed within a reasonable period of time. (3) Borrower
fails to perform any condition or to keep any promise or covenant
on this Agreement or any debt or agreement Borrower has with
Lender. (4) A default occurs under the terms of any instrument
evidencing or pertaining to this Agreement. (5) If Borrower is
a producer of crops, Borrower fails to plant, cultivate and harvest
crops in due season. (6) Any loan proceeds ate used for a
purpose that will contribute to excessive erosion of highly
credible land or to the conversion of wetlands to produce an
agricultural commodity, as further explained by federal law,
(7) Anything else happens that either significantly impairs
the value of the Property or, unless controlled by the New Jersey
Banking Law, causes Lender to reasonably believe that Lender will
have difficulty collecting the Loan.
REMEDIES. After Borrower defaults, and after Lender gives
any legally required notice and opportunity to cure, Lender may at
its option use any and all remedies Lender has under state or
federal law or in any of the Loan Documents, including, but not
limited to, terminating any commitment or obligation to make
additional advances or making all or any part of the amount owing
immediately due. Lender may set-off any amount due and payable
under the terms of the Loan against Borrower’s right to
receive money from Lender, unless prohibited by applicable law.
Except as otherwise required by law, by choosing any one or more of
these remedies Lender does not give up Lender’s right to use
any other remedy. Lender does not waive a default if Lender chooses
not to use a remedy; and may later use any remedies if the default
continues or occurs again.
COLLECTION EXPENSES AND ATTORNEYS’ FEES. To the extent
permitted by law, Borrower agrees to pay all expenses of
collection, enforcement and protection of Lender’s rights and
remedies under this Agreement. Expenses include, but are not
limited to, reasonable attorneys 1 fees including
attorney fees as permuted by the United States Bankruptcy Code,
court costs and other legal expenses. These expenses will bear
interest from the date of payment until paid in full at the
contract interest rate then in effect for the Loan. FL:
Attorneys’ fees will be 10 percent of the principal sum
due or a larger amount as the court judges as reasonable and just.
GA: Attorneys’ fees will be 15 percent of the principal
and interest owing.
GENERAL PROVISIONS. This Agreement is governed by the laws
of the jurisdiction where Lender Is located, the United States of
America and to the extent required, by the laws of the Jurisdiction
where the Property is located.
Joint
And Individual Liability And Successors. Each Borrower,
Individually, has the duty of fully performing the obligations on
the Loan. Lender can sue all or any of the Borrowers upon breach of
performance. The duties and benefits of this Loan will bind and
benefit the successors and assigns of Borrower and Lender.
Amendment, Integration And Severability. The Loan Documents
may not be amended or modified by oral agreement. Borrower agrees
that any party signing this Agreement as Borrower is authorized to
modify the terms of the Loan Documents, Borrower agrees that Lender
may inform any party who guarantees this Loan of any Loan
accommodations, renewals, extensions, modification, substitutions,
or future advances. The Loan Documents are the complete and final
expression of the understanding between Borrower and Lender. If any
provision of the Loan Documents is unenforceable, then the
unenforceable provision will be severed and the remaining
provisions will be enforceable,
Waivers And Consent. Borrower, to the extent permitted by
law, consents to certain actions Lender may take, and generally
waives defenses that may be available based on these actions or
based on the status of a party to the Loan. Lender may renew or
extend payments on the Loan. Leader may release any borrower,
endorser, guarantor, surety, or any other co-signer. Lender may
release, substitute, or impair any Property securing the Loan.
Lender’s course of dealing, or Lender’s. forbearance
from, or delay in, the exercise of any of Lender’s rights,
remedies, privileges, or right to insist upon Borrower’s
strict performance of any provisions contained in the Loan
Documents, will not be construed as a waiver by Lender, unless the
waiver is in writing and signed by Lender, Lender may participate
or syndicate the Loan and share any information that Lender decides
is necessary about Borrower and the Loan with the other
participants.
Interpretation. Whenever used, the singular includes the
plural and the plural includes the singular. The section headings
are for convenience only and are not to be used to interpret or
define the terms of this Agreement. Unless otherwise indicated, the
terms of this Agreement shall be construed in accordance with the
Uniform Commercial Code.
Notice. Unless otherwise required by law, any notice will be
given by delivering it or mailing it by first class mail to the
appropriate party’s address listed in this Agreement, or to
any other address designated in writing. Notice to one party will
be deemed to be notice to all parties, Time is of the
essence.
page 2
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ADDENDUM TO COMMERCIAL LOAN AGREEMENT
This Addendum to Commercial Loan
Agreement (this “ Addendum ”) is made to
and a part of the Commercial Loan Agreement, dated March 30,
2006 (the “ Agreement ”), by and among
SUNCOAST HOLDINGS, INC., a Delaware corporation (“
SH ”), BRANDYWINE INSURANCE HOLDINGS,
INC. , a Delaware corporation (“ BIH
”) and PATRIOT RISK SERVICES, INC. , a Delaware
corporation (“ PRS ”) (SH, BIH and PRS
collectively and jointly and severally referred to as “
Borrower ”), and BROOKE CREDIT
CORPORATION , a Kansas corporation (“
Lender ”).
All capitalized terms not otherwise
defined in this Addendum shall have the meaning ascribed thereto as
set forth in the above-referenced Agreement to which this Addendum
is an integral part thereof, and all references in this Agreement
and all other Loan Documents to the “Agreement” (as
hereinabove defined) shall refer to the Agreement as amended by
this Addendum.
For good and valuable consideration,
the receipt and sufficiency of which are acknowledged, it is agreed
as follows:
1. LOAN PROCEEDS. Borrower
warrants, represents and agrees that the proceeds of the Loan shall
be used solely for the following specific purposes and for no other
purpose: (i) to enable Borrower to provide capital in the
amount of $3,000,000 to Guarantee Insurance Company, a South
Carolina domiciled insurance company (“ GIC
”); (ii) to enable Borrower to provide future capital in
the amount of $2,300,000 to GIC and/or to finance Borrower’s
future expansion activities; (iii) to enable Borrower to
retire a promissory note payable to The Thomson Corporation in the
amount of $2,200,000; (iv) $750,000 to enable Borrower to purchase
a Borrower’s Assistance Plan from and in favor of CJD &
Associates, L.L.C. d/b/a Brooke Brokerage, a Kansas limited
liability company (“ Brooke ”), pursuant
to such documentation as Brooke may require in its sole and
absolute discretion; (v) $252,000 for the payment of all loan,
origination and other transaction-related fees that are payable by
Borrower to Lender, which fees shall in part be used to purchase a
financial guaranty policy from DB Indemnity (“ DB
”) in favor of Lender; and (vi) $150,000 for the payment of
consulting and advisory services to National Capital Advisors,
(vii) the remainder, if any, shall be disbursed to Borrower
for general business purposes.
2. NOTICE OF SALE OF COLLATERAL.
Borrower shall not sell, transfer or otherwise convey any of the
Collateral (as hereinafter defined) other than in the ordinary
course of business without Lender’s prior written consent,
which shall not be unreasonably withheld, delayed or conditioned.
In the event that Borrower desires to sell all or any portion of
the Collateral, Borrower shall provide to Lender ten
(10) business days advance written notice of said sale with a
copy of the proposed sale contract and a written request for
Lender’s approval of such transaction. Nothing set forth in
this paragraph shall be construed to restrict Borrower’s
ability to sell tangible personal property so long as such tangible
personal property is replaced within a reasonable period of time by
similar tangible personal property of comparable value, or the sale
of such tangible personal property does not have a material adverse
effect on the Borrower’s business operations or if said sale
is in the ordinary course of business.
