Exhibit 10.17
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (this
“ Agreement ”) is made effective as of the 30th
day of March, 2006 (the “ Effective Date ”) by
and between Brandywine Insurance Holdings, Inc., a Delaware
corporation (“ Pledgor ”) and Brooke Credit
Corporation, a Kansas corporation (“ Pledgee
”).
RECITALS
A. Pledgor owns 100% of the
issued and outstanding capital stock of Guarantee Insurance
Company, a South Carolina domiciled insurance company (“
GIC ”) (the “ Shares ”).
B. Pledgee has agreed to make a
loan to Pledgor, SunCoast Holdings, Inc., a Delaware corporation,
and Patriot Risk Services, Inc., a Delaware corporation
(collectively, the “ Borrowers ”) (the “
Loan ”) pursuant to that certain promissory note (the
“ Note ”) of even date herewith made payable by
Borrowers to Pledgee in the principal amount of $8,652,000 and the
related loan documents. The Note, together with this Agreement and
all other loan agreements, security agreements, guaranties, pledge
agreements and all other documents and instruments that evidence
and/or secure the Loan are referred to herein as the “
Loan Documents .”
C. Pledgor agreed to pledge the
Pledged Shares (as defined below) to Pledgee to secure
Borrowers’ obligations under the Loan Documents.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of
the premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. Definitions. The
following terms when used hereinafter shall have the following
meaning:
(a) The term “ Pledged
Shares ” means the Shares and any other stock (whether
common, preferred or otherwise) or other securities of GIC in which
Pledgor at any time has an interest, all whether now owned or at
any time hereafter acquired.
(b) The term “
Obligations ” means (i) the timely, full and
complete payment by Borrowers when due of all amounts due under the
Note, (ii) the timely, full and complete performance by
Borrowers of all of their obligations, liabilities and indebtedness
under the Loan Documents, and (iii) the timely, full and
complete performance by Pledgor of all of its obligations under
this Agreement.
(c) The term “ Event of
Default, ” as used in this Agreement, means (i) any
Event of Default as defined in any of the Loan Documents,
(ii) the nonperformance or breach by Pledgor of any provision
of this Agreement, (iii) the nonperformance or breach
by either of
the Borrowers of any provision of any of the Loan Documents, or
(iv) the failure of the Pledged Shares to constitute at least
100% of the capital stock of GIC.
2.
Pledge.
(a) As security for the payment and
performance of the Obligations, Pledgor hereby pledges to Pledgee
the Pledged Shares and grants Pledgee a first priority lien and
security interest therein. Upon the execution of this Agreement,
Pledgor shall deliver to Pledgee the original certificate(s)
representing the Pledged Shares, together with duly executed forms
of assignment sufficient to transfer title thereto to
Pledgee.
(b) If, while this Agreement is in
effect, Pledgor becomes entitled to receive or receives any
securities or other property in addition to, in substitution of, or
in exchange for any of the Pledged Shares (whether as a dividend or
a distribution, and whether in connection with any merger,
recapitalization, reorganization, or reclassification or
otherwise), Pledgor shall accept such securities or other property
on behalf of and for the benefit of Pledgee as additional security
for the Obligations and shall promptly deliver such additional
security to Pledgee, together with duly executed forms of
assignment, and such additional security shall be deemed for all
purposes to be part of the Pledged Shares hereunder.
3. Rights of
Pledgee.
(a) If any Event of Default occurs,
then in addition to any other rights set forth herein, Pledgee
shall have all the rights of a secured creditor at law or in equity
and under the Uniform Commercial Code in effect at the time in the
State of Kansas, including that Pledgee at its sole option may
without demand of performance or other demand, advertisement or
notice of any kind (except notice of the time and place of public
or private sale to the extent required by applicable law) to or
upon Pledgor or any other person (all of which are, to the extent
permitted by law, hereby expressly waived), immediately take any
one or more of the following actions:
(i) realize upon the Pledged Shares
or any part thereof and retain ownership of such Pledged Shares,
provided that Pledgee complies with all required regulatory
approvals in connection therewith; or
(ii) realize upon the Pledged Shares
or any part thereof and sell or otherwise dispose of and deliver
the Pledged Shares or any part thereof or interest therein, in one
or more lots and at such prices and on such terms as Pledgee may
deem best, provid
