Exhibit 10.1

 

SECOND AMENDMENT TO CREDIT AGREEMENT

 

This Second Amendment (this “Amendment”) to the Credit Agreement dated
January 22, 2015 among Patriot National, Inc., a Delaware corporation
(“Borrower”), the Lenders (as defined therein) and BMO Harris Bank N.A., as
administrative agent (as previously amended, supplemented or otherwise modified,
the “Credit Agreement”) is dated as of August 14, 2015.

1.Definitions.   Capitalized terms used and not defined in this Amendment have
the respective meanings assigned to them in the Credit Agreement.

2.Amendments to the Credit Agreement.   As of the Second Amendment Effective
Date (defined below), the Credit Agreement is hereby amended as follows:

(a)In Section 1.1, the following new defined terms shall be inserted in proper
alphabetical order:

“Add-On Term Lender” means any Lender that is the holder of an Add-On Term Loan.

“Add-On Term Loan” – see Section 2.1.3.

“Initial Term Loan” – see Section 2.1.3.  

“Second Amendment” means the Second Amendment to Credit Agreement dated as of
August 13, 2015 among the Borrower, the other Loan Parties, the Lenders party
thereto and the Administrative Agent.

“Second Amendment Effective Date” means the date on which all of the conditions
set forth in Section 4 of the Second Amendment have been satisfied.

(b)In Section 1.1, the following definitions are amended in their entirety to
read as follows:

“Adjusted EBITDA” is defined as Consolidated Net Income plus, to the extent
deducted in determining net income, tax expense (or less any tax benefits),
Interest Expense, depreciation and amortization, net realized losses (or less
any gains) on investments, loss on exchange of units and warrants, increase (or
less any decrease) in the fair value of common stock and warrant redemption
liability, non-cash stock compensation, and up to (x) $5,000,000 in any Fiscal
Year beginning with Fiscal Year 2016 and (y) $5,000,000 for the period from the
Second Amendment Effective Date through the end of Fiscal Year 2015 of
non-capitalized fees and expenses related to Permitted Acquisitions that have
been completed.  For any period in which a Permitted Acquisition of a line of
business or entity occurs, Adjusted EBITDA shall be calculated on a pro forma
basis as if the acquired line of business or entity had been acquired on the
first day of such

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period.  Adjusted EBITDA for the Fiscal Quarter ending September 30, 2014 shall
equal $9,737,868.

“Lender” means (a) each Person identified as a “Lender” on the signature pages
hereof, (b) each Person that becomes a party hereto pursuant to an Assignment
Agreement or a joinder agreement and (c) the respective successors and assigns
of the foregoing.  References to the “Lenders” and to the “Revolving Lenders”
shall include each Issuing Lender and the Swing Line Lender; for purposes of
clarification only, to the extent that BMO Harris Bank N.A. (or any other
Issuing Lender or successor Swing Line Lender) may have rights or obligations in
addition to those of the other Lenders or the other Revolving Lenders, as
applicable, due to its status as an Issuing Lender or the Swing Line Lender, its
status as such will be specifically referenced.

“Term Percentage” means, as to any Term Lender, the percentage that (a) the
outstanding principal amount of such Lender’s Term Loan is of (b) the aggregate
outstanding principal amount of all Term Loans.  The Term Percentage of each
Lender as of the Second Amendment Effective Date is set forth across from such
Lender’s name on Schedule 2.1.

(c)Section 2.1.1 is amended in its entirety to read as follows:

2.1.1Revolving Loans.  Each Revolving Lender will make loans in Dollars to the
Borrower on a revolving basis (“Revolving Loans”) during the period from the
Effective Date to the Revolving Termination Date in an amount equal to such
Revolving Lender’s Revolving Percentage of the aggregate amount of all Revolving
Loans requested by the Borrower from time to time; provided that the Revolving
Outstandings shall not at any time exceed the Revolving Commitment Amount;
provided further that until such time as the Borrower delivers a Compliance
Certificate demonstrating that the Total Leverage Ratio is equal to or less than
2.25 to 1.00 and the Borrower’s Adjusted EBITDA for the twelve-month period then
ended is at least $70,000,000, the Revolving Outstandings shall not exceed
$30,000,000 (for purposes of calculating Adjusted EBITDA in any Compliance
Certificate delivered pursuant to this Section 2.1.1, the add-back in the
definition of Adjusted EBITDA for non-capitalized fees and expenses related to
Permitted Acquisitions shall be excluded).

(d)Section 2.1.2 is amended in its entirety to read as follows:

2.1.2Letters of Credit.  (a) Each Issuing Lender will issue standby letters of
credit (each a “Letter of Credit”) in Dollars at the request of and for the
account of the Borrower from time to time, subject to Section 2.3, before the
date that is 30 days prior to the scheduled Revolving Termination Date, and (b)
as more fully set forth in Section 2.3, each Revolving Lender agrees to purchase
a participation in each Letter of Credit; provided that (x) the aggregate Stated
Amount of all Letters of Credit shall not at any time exceed $10,000,000 and (y)
the Revolving Outstandings shall not at any time exceed the Revolving Commitment
Amount;

 

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provided further until such time as the Borrower delivers a Compliance
Certificate demonstrating that the Total Leverage Ratio is equal to or less than
2.25 to 1.00 and the Borrower’s Adjusted EBITDA for the twelve-month period then
ended is at least $70,000,000, the Revolving Outstandings shall not exceed
$30,000,000 (for purposes of calculating Adjusted EBITDA in any Compliance
Certificate delivered pursuant to this Section 2.1.2, the add-back in the
definition of Adjusted EBITDA for non-capitalized fees and expenses related to
Permitted Acquisitions shall be excluded). 

(e)Section 2.1.3 is amended in its entirety to read as follows:

2.1.3Term Loans.  

(a)On the Effective Date, each Term Lender made a term loan (each, an “Initial
Term Loan”) in Dollars to the Borrower in the amount set forth on Part A of
Schedule 2.1.3.  The aggregate amount of Initial Term Loans on the Effective
Date was $40,000,000.  

(b)Prior to the Second Amendment Effective Date, certain Term Lenders made
Incremental Term Loans to the Borrower in the amounts set forth on Part B of
Schedule 2.1.3 and in an aggregate amount of $20,000,000 (the “Initial
Incremental Term Loans” and together with the Initial Term Loans, the “Initial
Loans”)

(c)On the Second Amendment Effective Date, each Add-On Term Lender will make a
term loan (each, an “Add-On Term Loan”, and together with the Initial Loans and
any Incremental Term Loans made pursuant to Section 2.5, the “Term Loans”) in
Dollars in the amount set forth on Part C of Schedule 2.1.3.  The aggregate
amount of all Add-On Term Loans on the Second Amendment Effective Date is
$50,000,000.

(c)Term Loans that are repaid may not be reborrowed.

(f)Section 2.4.1

2.4.1.Swing Line Loans.  Subject to the terms and conditions of this Agreement,
the Swing Line Lender may from time to time, in its discretion, make loans to
the Borrower (collectively the “Swing Line Loans” and individually each a “Swing
Line Loan”) in accordance with this Section 2.4 in an aggregate amount not at
any time exceeding $10,000,000; provided that the Revolving Outstandings shall
not at any time exceed the Revolving Commitment Amount; provided further that
until such time as the Borrower delivers a Compliance Certificate demonstrating
that the Total Leverage Ratio is equal to or less than 2.25 to 1.00 and the
Borrower’s Adjusted EBITDA for the twelve-month period then ended is at least
$70,000,000, the Revolving Outstandings shall not exceed $30,000,000 (for
purposes of calculating Adjusted EBITDA in any Compliance Certificate delivered
pursuant to this Section 2.4.1, the add-back in the definition of Adjusted
EBITDA for non-capitalized fees and expenses related to Permitted Acquisitions

 

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shall be excluded).  Amounts borrowed under this Section 2.4 may be borrowed,
repaid and (subject to the agreement of the Swing Line Lender) reborrowed until
the Revolving Termination Date.  Swing Line Loans shall be Base Rate Loans. 

(g)Section 2.5(a) is amended in its entirety to read as follows:

(a)If no Unmatured Event of Default or Event of Default exists, the Borrower
may, by written notice (substantially in the form of Exhibit I) to the
Administrative Agent (which shall promptly advise each Lender) request the
making of an additional tranche of term loans (each an “Incremental Term Loan”)
by an amount for all such requests, plus the amount of any increases in the
Revolving Commitments pursuant to Section 2.6, not to exceed $40,000,000 from
and after the Second Amendment Effective Date; provided that any such request
shall (x) be in a minimum amount of $5,000,000 or a higher integral multiple of
$1,000,000 and (y) set forth the date that the Borrower proposes the Incremental
Term Loans be made, the requested amount and the proposed terms of the
Incremental Term Loans.  At the time of sending such notice, the Borrower (in
consultation with the Administrative Agent) shall specify the time period within
which each Lender is requested to respond (which shall in no event be less than
ten Business Days from the date of delivery of such notice to the Lenders).

(h)Section 2.5(e) is amended in its entirety to read as follows:

(e)The Incremental Term Loans shall be on the same terms as the Term Loans made
prior to such date with an amortization schedule in accordance with Schedule
6.1(b).  The supplement to this Agreement referenced in Section 2.5(f) may,
without the consent of any Lender that is not an Incremental Lender, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the opinion of the Administrative Agent to effect the provisions
of this Section 2.5, including an amortization schedule that sets forth the
amounts of each amortization payment in accordance with Schedule 6.1(b).

(i)Section 2.5(h) is amended in its entirety to read as follows:

(h)The Incremental Term Loans, shall constitute Term Loans under, and shall be
entitled to all the benefits afforded by, this Agreement and the other Loan
Documents and shall, without limiting the foregoing, benefit equally and ratably
with respect to the security interests created by the Collateral Documents.  The
Loan Parties shall take any actions reasonably required by the Administrative
Agent to ensure and/or demonstrate that the Lien and security interests granted
by the Collateral Documents continue to be perfected under the Uniform
Commercial Code (as defined in the Security Agreement) or other Applicable Law
relating to the perfection of security interests after giving effect to the
establishment of the Incremental Term Loans.

 

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(j)Section 2.6(a) is amended in its entirety to read as follows: 

(a)Request for Increase.  Provided there exists no Unmatured Event of Default or
Event of Default, upon notice (substantially in the form of Exhibit I) to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may
from time to time request an increase in the Revolving Commitments by an amount
for all such requests, plus the amount of any Incremental Term Loans, not to
exceed $40,000,000 from and after the Second Amendment Effective Date; provided
that (i) any such request for an increase shall be in a minimum amount of
$5,000,000 or a higher integral multiple of $1,000,000 and (ii) the Borrower may
make a maximum of three such requests.  At the time of sending such notice, the
Borrower (in consultation with the Administrative Agent) shall specify the time
period within which each Revolving Lender is requested to respond (which shall
in no event be less than ten Business Days from the date of delivery of such
notice to the Revolving Lenders).

(k)Section 6.1 is amended in its entirety to read as follows:

6.1Repayment of Loans.  (a)  The Initial Loans and the Add-On Term Loans shall
be repaid in installments on the dates and in the amounts set forth on Schedule
6.1(a) and the Incremental Term Loans shall be repaid in installments on the
dates and in the amounts set forth on Schedule 6.1(b), in each case, with a
final installment on the Term Maturity Date in an amount equal to the then
unpaid principal balance of such Term Loans.  Each such installment shall be
applied to repay such Term Loans of the Term Lenders according to their
respective Term Percentages.

(l)Section 12.1 is amended by replacing the term “Term Loans” with “Initial Term
Loans” in each place where it appears therein.

(m)Schedule 2.1 of the Credit Agreement is replaced with Schedule 2.1 attached
hereto.

(n)Schedule 2.1.3 attached hereto is added to the Credit Agreement.

(o)Schedule 6.1 of the Credit Agreement is replaced with Schedules 6.1(a) and
6.1(b) attached hereto.

(p)Schedule 9.14 of the Credit Agreement is replaced with Schedule 9.14 attached
hereto.

3.Representations and Warranties. Each Loan Party represents and warrants to the
Administrative Agent and the Lenders that:

(a)Authorization; No Conflict.  The execution, delivery and performance by such
Loan Party of this Amendment, and the consummation of the transactions
contemplated hereby, (i) are within such Loan Party’s limited liability company,
limited partnership or corporate powers, as applicable, (ii) have been duly
authorized by all

 

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necessary limited liability company, limited partnership or corporate action, as
applicable, (iii) do not contravene (x) such Loan Party’s organizational
documents or (y) any law, regulation or contractual restriction binding on or
affecting such Loan Party and (iv) will not result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of such
Loan Party or any of its Subsidiaries.  

(b)Governmental Approvals.  No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority or regulatory body or
any other third party is required for the due execution, delivery and
performance by such Loan Party of this Amendment.

(c)Enforceability.  This Amendment has been duly executed and delivered by such
Loan Party and is the legal, valid and binding obligation of such Loan Party,
enforceable against such Loan Party in accordance with its terms, except as
affected by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws relating to or affecting the
enforcement of creditors’ rights generally and/or (ii) general principles of
equity (regardless of whether such enforcement is considered in a proceeding at
law or in equity).

(d)Representations and Warranties.  On the date hereof, each representation and
warranty set forth in Section 9 of the Credit Agreement, as amended by this
Amendment, is true and correct in all material respects on and as of the date
hereof with the same effect as if made on and as of the date hereof (except to
the extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case such representation or warranty was
true and correct as of such date).

(e)No Default.  No Event of Default or Unmatured Event of Default exists or will
exist after giving effect to this Amendment.

4.Effectiveness. This Amendment shall become effective on the date (the “Second
Amendment Effective Date”) when the Administrative Agent has received each of
the following, in form and substance satisfactory to the Administrative Agent:

(a)counterparts of this Amendment signed by each Loan Party, the Administrative
Agent, each Add-On Term Lender and the Required Lenders;

(b)a certificate signed by each Loan Party certifying that the representations
and warranties set forth in Sections 3(a) through 3(e) are true and correct;

(c)favorable opinions of Baker & Hostetler LLP, counsel to the Loan Parties,
addressed to the Lenders and the Administrative Agent;

(d)evidence that concurrently with the effectiveness of this Amendment, the
Borrower will acquire Global HR Research, LLC;

(e)certified copies of all documents evidencing any necessary corporate (or
other similar) action, and any material third-party consents and governmental
approvals

 

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(if any) required for the execution, delivery and performance (including the
intended use of the Add-On Term Loans) by each Loan Party of this Amendment; 

(f)certified copies of resolutions of the Governing Body of each Loan Party
authorizing or ratifying the execution, delivery and performance by such Person
of this Amendment;

(g)certified copies of Uniform Commercial Code and other lien search reports
dated a date reasonably near to the Second Amendment Effective Date, listing all
effective financing statements that name any Loan Party (under its present name
and any previous names) as debtor, together with copies of such financing
statements;

(h)a pro forma Compliance Certificate giving effect to the Acquisition of Global
HR Research, LLC and the Add-On Term Loans;

(i)all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the Patriot Act;

(j)certification that since December 31, 2014, there has been no event that
constitutes or would reasonably be expected to have a Material Adverse Effect;

(k)evidence that all fees and other amounts that are then due and payable
pursuant to the Fee Letter dated as of June 29, 2015 between the Borrower and
BMO Capital Markets Corp. and pursuant to Section 15.6 of the Credit Agreement
shall have been paid;

(l)a joinder agreement with respect to any Add-On Lender that was not a party to
the Credit Agreement;

(m)evidence that on the Second Amendment Effective Date, after giving effect to
the Add-On Term Loans and the Acquisition described in Section 4(h), the
Borrower has a Total Leverage Ratio of less than 3.0 to 1.0; provided that
solely for purposes of this Section 4(m), Total Leverage Ratio shall be
calculated by including in Total Debt the unused portion of the Revolving
Commitment Amount and excluding from Total Debt the amount of any Capitalized
Lease Obligations;

(n)the Revolving Oustandings shall not be greater than $30,000,000; and

(o)such other documents as the Administrative Agent or any Lender may reasonably
request.

5.Continuing Effectiveness, etc.

(a)Except to the extent expressly set forth herein, all of the terms and
conditions of the Credit Agreement and the other Loan Documents remain unchanged
and in full force and effect.  Each Loan Party affirms that after giving effect
to this Amendment, the Credit Agreement, as modified hereby, and each other Loan
Document

 

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to which any Loan Party is a party will remain in full force and effect and will
continue to constitute a legal, valid and binding obligation of such Loan Party,
enforceable against such Loan Party in accordance with its terms except insofar
as such enforcement may be limited by Debtor Relief Laws. 

(b)Upon the effectiveness hereof, all references to the Credit Agreement set
forth in any other agreement or instrument shall, unless otherwise specifically
provided, be references to the Credit Agreement as amended hereby.  

6.Miscellaneous.  The provisions of Sections 1.2, 15.6(a), 15.7, 15.9, 15.10,
15.11, 15.12, 15.16 and 15.17 of the Credit Agreement are incorporated herein by
reference, mutatis mutandis.  

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

 

PATRIOT NATIONAL, INC.

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT SERVICES, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT BENEFITS ADMINISTRATORS, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT CAPTIVE MANAGEMENT, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT CARE, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT CARE HOLDINGS, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT CARE SERVICES, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

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PATRIOT CLAIM SERVICES, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT LEGAL SERVICES, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT RECOVERY SERVICES, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

PATRIOT TECHNOLOGY SOLUTIONS, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

VIKARAN TECHNOLOGY SOLUTIONS, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

CORPORATE CLAIMS MANAGEMENT, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

FORZA LIEN, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

 

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INSURELINX, INC.

 

 

By:

/s/ Steven M. Mariano

Name:

Steven M. Mariano

Title:

CEO

 

PATRIOT RISK SERVICES, INC.

 

 

By:

/s/ Christopher L. Pizzo

Name:

Christopher L. Pizzo

Title:

Secretary

 

 

PATRIOT CARE MANAGEMENT, INC.

 

 

By:

/s/ Christopher L. Pizzo

Name:

Christopher L. Pizzo

Title:

Vice-President, Secretary

 

 

PATRIOT UNDERWRITERS, INC.

 

 

By:

/s/ Christopher L. Pizzo

Name:

Christopher L. Pizzo

Title:

Secretary

 

 

CONTEGO INVESTIGATIVE SERVICES, INC.

 

 

By:

/s/ Christopher L. Pizzo

Name:

Christopher L. Pizzo

Title:

Vice-President

 

 

TRIGEN INSURANCE SOLUTIONS, INC.

 

 

By:

/s/ Christopher L. Pizzo

Name:

Christopher L. Pizzo

Title:

Vice-President, Secretary

 

 

TRIGEN HOSPITALITY GROUP, INC.

 

 

By:

/s/ Elizabeth M. Hensen

Name:

Elizabeth M. Hensen

Title:

Assistant Secretary

 

 

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CWIBENEFITS, INC.

 

 

By:

/s/ Elizabeth M. Hensen

Name:

Elizabeth M. Hensen

Title:

Assistant Secretary

 

CONTEGO SERVICES GROUP, LLC

 

By:

Patriot Services, Inc., its Manager

 

 

 

By:

/s/ Steven M. Mariano

 

Name:

Steven M. Mariano

 

Title:

CEO

 

CONTEGO RECOVERY, LLC

 

 

By:

Contego Services Group, LLC, its Manager

 

 

 

By:

Patriot Services, Inc., its Manager

 

 

 

 

 

 

By:

/s/ Steven M. Mariano

 

 

Name:

Steven M. Mariano

 

 

Title:

CEO

 

DECISION UR, LLC

 

By:

Patriot Technology Solutions, Inc., its Manager

 

 

 

By:

/s/ Steven M. Mariano

 

Name:

Steven M. Mariano

 

Title:

CEO

 

 

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BMO HARRIS BANK N.A., as Administrative Agent and a Lender

 

By:

/s/ Joan Spiotto Murphy

Name:

Joan Spiotto Murphy

Title:

Director

 

 

FIFTH THIRD BANK

 

By:

/s/ Gary Ladolcetta

Name:

Gary Ladolcetta

Title:

SVP

 

 

SUNTRUST

 

By:

/s/ Paula Mueller

Name:

Paula Mueller

Title:

Director

 

 

CITY NATIONAL BANK OF FLORIDA

 

By:

/s/ Gabriella Cioli

Name:

Gabriella Cioli

Title:

SVP – Corporate Banking

 

 

THE PRIVATEBANK AND TRUST COMPANY

 

By:

/s/ Andrew C. Haak

Name:

Andrew C. Haak

Title:

Managing Director

 

* All schedules and exhibits to this Exhibit 2.11 have been omitted pursuant to
Item 601(b)(2) of Regulation S-K. The schedules include a list of assumed
customer contracts, assumed liabilities, wiring instructions, and licenses. The
exhibits include the assignment and assumption agreement and the intellectual
property assignment agreement. A copy of any omitted schedule and/or exhibit
will be furnished to the Securities and Exchange Commission upon request.