exv10w3



 







Exhibit 10.3




First Amendment to Credit Agreement

And Waiver of Defaults




     This FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER OF DEFAULTS (this “First Amendment”),
dated as of August 12, 2005, is among AFFIRMATIVE INSURANCE HOLDINGS, INC., a Delaware corporation
(“Borrower”), each other Obligor, and THE FROST NATIONAL BANK, a national banking association, as
Administrative Agent, Lender and L/C Issuer.



RECITALS:




     Borrower, Administrative Agent, Lender and L/C Issuer have previously entered into the Credit
Agreement dated as of July 30, 2004 (such agreement, together with all amendments and restatements,
the “Credit Agreement”).



     Borrower has requested amendments to and waivers of certain provisions of the Credit Agreement
and waivers of existing Defaults and Events of Default.



     Lender has agreed to amend the Credit Agreement, waive certain provisions of the Credit
Agreement and waive the existing Defaults and Events of Default, subject to the terms of this First
Amendment.



AGREEMENT:




     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the
parties hereto agree as follows:



ARTICLE I




Definitions




     1.1 Definitions. All capitalized terms not otherwise defined herein have the same
meanings as in the Credit Agreement.



ARTICLE II




Amendments to Credit Agreement




     2.1 Amendments to Credit Agreement Section 1.1 .



     (a) Section 1.1 is amended by adding the following in alphabetical order:




“Affirmative Trust I” means Affirmative Insurance Holdings Statutory Trust I, a
special purpose statutory Delaware business trust established by Borrower, of which
Borrower holds all the common securities, which is the issuer of the 2004 Preferred
Securities, and which purchased from Borrower the



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2004 Debentures with the net proceeds of the issuance and sale of the 2004 Preferred
Securities.




“Affirmative Trust II” means Affirmative Insurance Holdings Statutory Trust II, a
special purpose statutory Delaware business trust established by Borrower, of which
Borrower holds all the common securities, which is the issuer of the 2005 Preferred
Securities, and which purchased from Borrower the 2005 Debentures with the net
proceeds of the issuance and sale of the 2005 Preferred Securities.




“Affirmative Trust I Declaration of Trust” means the Amended and Restated
Declaration of Trust of Affirmative Trust I, dated as of December 21, 2004, together
with all amendments and restatements.




“Affirmative Trust II Declaration of Trust” means the Amended and Restated
Declaration of Trust of Affirmative Trust II, dated as of June 1, 2005, together
with all amendments and restatements.




“Expenses Incurred” means (a) if the calculation is made as at the last day of the
first three fiscal quarters of a RIC, the amount of other underwriting expenses
incurred for the four fiscal quarters of such RIC ended as at such last day,
computed using the same information and in the same manner (except that such
computation shall be for the preceding four fiscal quarters) as was utilized in
preparing page 4, line 4 of the September 30, 2004 quarterly regulatory financial
statement of such RIC, utilizing the format promulgated by NAIC and filed with the
applicable Insurance Regulator, or if such format is changed after the Agreement
Date, the same type of information, computed in the same manner (except that such
computation shall be for the preceding four fiscal quarters), as contained on page
4, line 4 of such regulatory financial statement of such RIC dated September 30,
2004, or (b) if the calculation is made as at the last day of the fiscal year of a
RIC, other underwriting expenses incurred for the period of calculation as shown on
page 4, line 4 of the regulatory financial statement of such RIC as would be
prepared for such period utilizing the identical format promulgated by NAIC and
utilized by such RIC in preparing the December 31, 2004 annual statements filed with
the applicable Insurance Regulator, or if such format is changed after the Agreement
Date, the same type of information, computed in the same manner, as contained on
page 4, line 4 of such regulatory financial statement of such RIC dated December 31,
2004.




“Expense Ratio” means the ratio of Expenses Incurred to Premiums Written.




“Loss Ratio” means the ratio of Losses Incurred to Premiums Earned.




“Losses Incurred” means losses and loss adjustment expenses incurred for the period
of calculation, being the sum of (a) (i) if the calculation is made as at the last
day of the first three fiscal quarters of a RIC, the amount of losses incurred for
the four fiscal quarters of such RIC ended as at such last day, computed using the
same information and in the same manner (except that such computation shall



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be for the preceding four fiscal quarters) as was utilized in preparing page 4, line
2.4 of the September 30, 2004 quarterly regulatory financial statement of such RIC,
utilizing the format promulgated by NAIC and filed with the applicable Insurance
Regulator, or if such format is changed after the Agreement Date, the same type of
information, computed in the same manner (except that such computation shall be for
the preceding four fiscal quarters), as contained on page 4, line 2.4 of such
regulatory financial statement of such RIC dated September 30, 2004, or (ii) if the
calculation is made as at the last day of the fiscal year of a RIC, losses incurred
as shown on page 4, line 2 of the regulatory financial statement of such RIC as
would be prepared for such period utilizing the identical format promulgated by NAIC
and utilized by such RIC in preparing the December 31, 2004 annual statements filed
with the applicable Insurance Regulator, or if such format is changed after the
Agreement Date, the same type of information, computed in the same manner, as
contained on page 4, line 2 of such regulatory financial statement of such RIC dated
December 31, 2004, plus (b) (i) if the calculation is made as at the last day of the
first three fiscal quarters of a RIC, the amount of loss expenses incurred for the
four fiscal quarters of such RIC ended as at such last day, computed using the same
information and in the same manner (except that such computation shall be for the
preceding four fiscal quarters) as was utilized in preparing page 4, line 3 of the
September 30, 2004 quarterly regulatory financial statement of such RIC, utilizing
the format promulgated by NAIC and filed with the applicable Insurance Regulator, or
if such format is changed after the Agreement Date, the same type of information,
computed in the same manner (except that such computation shall be for the preceding
four fiscal quarters), as contained on page 4, line 3 of such regulatory financial
statement of such RIC dated September 30, 2004, or (ii) if the calculation is made
as at the last day of the fiscal year of a RIC, loss expenses incurred as shown on
page 4, line 3 of the regulatory financial statement of such RIC as would be
prepared for such period utilizing the identical format promulgated by NAIC and
utilized by such RIC in preparing the December 31, 2004 annual statements filed with
the applicable Insurance Regulator, or if such format is changed after the Agreement
Date, the same type of information, computed in the same manner, as contained on
page 4, line 3 of such regulatory financial statement of such RIC dated December 31,
2004.




“Premiums Earned” means (a) if the calculation is made as at the last day of the
first three fiscal quarters of a RIC, the amount of premiums earned for the four
fiscal quarters of such RIC ended as at such last day, computed using the same
information and in the same manner (except that such computation shall be for the
preceding four fiscal quarters) as was utilized in preparing page 4, line 1.4 of the
September 30, 2004 quarterly regulatory financial statement of such RIC, utilizing
the format promulgated by NAIC and filed with the applicable Insurance Regulator, or
if such format is changed after the Agreement Date, the same type of information,
computed in the same manner (except that such computation shall be for the preceding
four fiscal quarters), as contained on page 4, line 1.4 of such regulatory financial
statement of such RIC dated September 30, 2004, or (b) if the calculation is made as
at the last day of the fiscal year of a RIC, premiums earned



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for the period of calculation as shown on page 4, line 1 of the regulatory financial
statement of such RIC as would be prepared for such period utilizing the identical
format promulgated by NAIC and utilized by such RIC in preparing the December 31,
2004 annual statements filed with the applicable Insurance Regulator, or if such
format is changed after the Agreement Date, the same type of information, computed
in the same manner, as contained on page 4, line 1 of such regulatory financial
statement of such RIC dated December 31, 2004.




“Premiums Written” means (a) if the calculation is made as at the last day of the
first three fiscal quarters of a RIC, the amount of net premiums written for the
four fiscal quarters of such RIC ended as at such last day, computed using the same
information and in the same manner (except that such computation shall be for the
preceding four fiscal quarters) as was utilized in preparing the parenthetical on
page 4, line 1.4 of the regulatory financial statement of such RIC, utilizing the
format promulgated by NAIC and filed with the applicable Insurance Regulator, or if
such format is changed after the Agreement Date, the same type of information,
computed in the same manner (except that such computation shall be for the preceding
four fiscal quarters), as contained in the parenthetical on page 4, line 1.4 of such
regulatory financial statement of such RIC dated September 30, 2004, or (b) if the
calculation is made as at the last day of the fiscal year of a RIC, net premiums
written as shown on page 8, Part 1B, line 34, column 6 of the regulatory financial
statement of such RIC as would be prepared for such period utilizing the identical
format promulgated by NAIC and utilized by such RIC in preparing the December 31,
2004, quarterly statements filed with the applicable Insurance Regulator, or if such
format is changed after the Agreement Date, the same type of information, computed
in the same manner, as contained on page 8, Part 1B, line 34, column 6 of such
regulatory financial statement of such RIC dated as of December 31, 2004.




“2004 Debentures” means the $30,928,000 aggregate principal amount of Junior
Subordinated Debt Securities due 2035 issued by Borrower to Affirmative Trust I.




“2004 Documents” means any equity security of Affirmative Trust I, any 2004
Debenture, any 2004 Preferred Security, the 2004 Indenture, the Affirmative Trust I
Declaration of Trust, the 2004 Guaranty, any document evidencing or governing any
equity or Debt of Affirmative Trust I and all other documents and instruments
executed and delivered by Borrower or Affirmative Trust I in connection with any of
the foregoing.




“2004 Guaranty” means the Guaranty Agreement dated December 21, 2004, made by
Borrower in favor of JPMorgan Chase Bank, N.A., as Guarantee Trustee, together with
all amendments and restatements.




“2004 Indenture” means the Indenture dated December 21, 2004, between Borrower and
JPMorgan Chase Bank, N.A., as Trustee, together with all amendments and
restatements.



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“2004 Preferred Securities” means the $30,000,000 Preferred Securities issued by
Affirmative Trust I.




“2005 Debentures” means the $25,774,000 aggregate principal amount of Junior
Subordinated Debt Securities due 2035 issued by Borrower to Affirmative Trust II.




“2005 Documents” means any equity security of Affirmative Trust II, any 2005
Debenture, any 2005 Preferred Security, the 2005 Indenture, the Affirmative Trust II
Declaration of Trust, the 2005 Guaranty, any document evidencing or governing any
equity or Debt of Affirmative Trust II and all other documents and instruments
executed and delivered by Borrower or Affirmative Trust II in connection with any of
the foregoing.




“2005 Guaranty” means the Guaranty Agreement dated June 1, 2005, made by Borrower in
favor of JPMorgan Chase Bank, N.A., as Guarantee Trustee, together with all
amendments and restatements.




“2005 Indenture” means the Indenture dated June 1, 2005, between Borrower and
JPMorgan Chase Bank, N.A., as Trustee, together with all amendments and
restatements.




“2005 Preferred Securities” means the $25,000,000 Preferred Securities issued by
Affirmative Trust II.



     (b) The definition of “Combined Ratio” is deleted in its entirety and the following is
substituted in lieu thereof:




“Combined Ratio” means, with respect to a RIC, the sum of the Loss Ratio and the
Expense Ratio (expressed as a percentage rounded to two decimal places), for the
four fiscal quarter period ended on the date of determination, as calculated in
accordance with the format of the statutory financial statements for a property and
casualty insurance company prescribed by NAIC.



     (c) The definition of “Consolidated Net Worth” is deleted in its entirety and the following is
substituted in lieu thereof:




“Consolidated Net Worth” means the sum of (a) the net worth of Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP after
appropriate deduction for any minority interests in Subsidiaries, plus (b) if at the
time of determination all amounts owed with respect to the 2004 Debentures and the
2004 Guaranty are subordinated to all Obligations on terms acceptable to Required
Lenders, an amount equal to the lesser of (i) the unpaid principal amount (not to
exceed $30,928,000) of the 2004 Debentures, and (ii) the outstanding amount (not to
exceed $30,000,000) of the 2004 Preferred Securities, plus (c) if at the time of
determination all amounts owed with respect to the 2005 Debentures and the 2005
Guaranty are subordinated to all Obligations on terms acceptable to Required
Lenders, an amount equal to the lesser of (i) the unpaid



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principal amount (not to exceed $25,774,000) of the 2005 Debentures, and (ii) the
unpaid amount (not to exceed $25,000,000) of the 2005 Preferred Securities.



     (d) The definition of “Debt” is deleted in its entirety and the following is substituted in
lieu thereof:




“Debt” means, at any time, for any Person, (a) Capital Leases, (b) Contingent Debt,
(c) debt created, issued, incurred or assumed for money borrowed or for the deferred
purchase price of property purchased, (d) all debt, obligations and liabilities
secured by any Lien upon any property owned by such Person, even though it has not
assumed or become liable for the payment of same, and (e) liabilities in respect of
unfunded vested benefits under any Plans; provided, that, for purposes of
Section 7.3, Debt shall not include the unpaid principal amount of the 2004
Debentures or the 2005 Debentures or the obligations with respect to the 2004
Guaranty or the 2005 Guaranty if at the time of determination all amounts owed with
respect to the 2004 Debentures, the 2004 Guaranty, the 2005 Debentures and the 2005
Guaranty are subordinated to all Obligations on terms acceptable to Required
Lenders.



     (e) The definition of “Permitted Acquisition” is deleted in its entirety and the following is
substituted in lieu thereof.




“Permitted Acquisition” means the acquisition of all or substantially all of the
assets or any of the equity of a property and casualty insurance company that is
not, as of the acquisition effective date, issuing insurance policies other than
automobile insurance policies or liable with respect to any insurance policy in
force on such acquisition effective date other than automobile insurance policies,
insurance agency or managing general agency, so long as in each case (a) there
exists no Default or Event of Default both before and after giving effect to any
such acquisition, (b) if such acquired entity is a property and casualty insurance
company, the majority of the authorized, issued and outstanding equity of such
acquired entity and the majority of each class of equity of such acquired entity
that has voting rights (including voting rights arising upon the occurrence of a
contingency) will be owned by either a Subsidiary of Borrower or a RIC, (c) if such
acquired entity is an insurance agency or managing general agency, the majority of
the authorized, issued and outstanding equity of such acquired entity and the
majority of each class of equity of such acquired entity that has voting rights
(including voting rights arising upon the occurrence of a contingency) will be owned
by either Borrower or a wholly-owned Subsidiary of Borrower that is a Guarantor, (d)
such acquired assets are acquired by either Borrower or a wholly-owned Subsidiary of
Borrower that is a Guarantor, (e) Borrower provides Administrative Agent with
information and a Compliance Certificate demonstrating pro forma compliance with the
terms of this Agreement through the end of the third full fiscal quarter occurring
after the effective date of such acquisition, after giving effect to such
acquisition, including, without limitation, each provision of Sections 7.1
through 7.5, (f) the aggregate cash portion of the consideration for all
such acquisitions does not exceed $5,000,000 during any



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fiscal year of Borrower or $10,000,000 over the term of this Agreement, and (g) each
acquisition is consummated pursuant to a negotiated acquisition agreement on a
non-hostile basis pursuant to an acquisition agreement approved by the board of
directors or other applicable governing body of the entity to be acquired prior to
the commencement thereof, and (h) each acquired entity executes and delivers, or
causes to be executed and delivered, each of the documents described in Sections
7.10(a) – (i).



     (f) The definition of “Permitted Debt” is deleted in its entirety and the following is
substituted in lieu thereof:




“Permitted Debt” means (a) Existing Debt, (b) the Obligations, (c) trade accounts
payable and other similar obligations incurred in the ordinary course of business,
(d) intercompany balances in the ordinary course of business among Borrower and its
Subsidiaries; provided, that all amounts owed by any Obligor to its Subsidiaries
shall be subordinated to all Obligations on terms acceptable to Required Lenders,
and, provided further, the aggregate amount of all Debt payable by SCHI Entities to
Borrower and its Subsidiaries shall not exceed $1,000,000 at any time, (e) the 2004
Debentures; provided, that all amounts owed with respect to the 2004 Debentures
shall be subordinated to all Obligations on terms acceptable to Required Lenders,
and; provided further, the aggregate principal amount of all 2004 Debentures shall
not exceed $30,928,000, (f) the 2004 Guaranty; provided, that all amounts owed with
respect to the 2004 Guaranty shall be subordinated to all Obligations on terms
acceptable to Required Lenders, (g) the 2005 Debentures; provided, that all amounts
owed with respect to the 2005 Debentures shall be subordinated to all Obligations on
terms acceptable to Required Lenders, and; provided further, the aggregate principal
amount of all 2005 Debentures shall not exceed $25,774,000, (i) the 2005 Guaranty;
provided, that all amounts owed with respect to the 2005 Guaranty shall be
subordinated to all Obligations on terms acceptable to Required Lenders, (j) Capital
Leases of Borrower and each of its Subsidiaries in an aggregate principal amount not
to exceed $500,000 at any time, and (k) other Debt of Borrower subordinated to the
Obligations on terms acceptable to Required Lenders in their discretion.



     (g) The definition of “Subsidiary” is amended by adding the following at the end thereof:




For the purposes of the Loan Documents, Affirmative Trust I and Affirmative Trust II
are each deemed to be a Subsidiary of Borrower.



     2.2 Amendments to Section 6.2(a).



     Sections 6.2(a)(i) and (ii) are deleted in their entirety and the following is
substituted in lieu thereof:




     (i) As soon as available, but in any event within 15 days after the first to
occur of (A) the required filing date (as established by securities Laws), and



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(B) the date on which actually filed, annual consolidated and consolidating
Financial Statements (such consolidated Financial Statements to be audited), showing
the consolidated and consolidating financial condition and results of operations of
Borrower and its consolidated Subsidiaries as of, and for the year ended on, such
last day, accompanied by (A) an opinion of Auditors containing only qualifications
and emphasis acceptable to Administrative Agent and Required Lenders, which opinion
shall state that said consolidated Financial Statements have been prepared in
accordance with GAAP consistently applied, and that the examination of Auditors in
connection with such consolidated Financial Statements has been made in accordance
with generally accepted auditing standards and that said consolidated Financial
Statements present fairly the consolidated financial condition of Borrower and its
consolidated Subsidiaries and their results of operations; (B) a certificate of the
chief financial officer of Borrower, which certificate shall state that said
Financial Statements present fairly the financial condition of Borrower and its
consolidated Subsidiaries and their results of operations; and (C) a description of
all Contingent Debt and Off-Balance Sheet Liabilities of Borrower and its
Subsidiaries.




     (ii) [INTENTIONALLY OMITTED]



     2.3 Amendment to Section 6.2(b)(i).



     Section 6.2(b)(i) is amended by deleting “(including the last fiscal quarter of each
fiscal year)” and substituting “(excluding the last fiscal quarter of each fiscal year)” in lieu
thereof.



     2.4 Amendment to Section 6.2(b)(v).



     Section 6.2(b)(v) is deleted in its entirety and the following is substituted in lieu
thereof:




     (v) Together with the Financial Statements delivered pursuant to Section
6.2(b)(i) (with respect to the first three fiscal quarters of each fiscal year)
and within 60 days after the last day of the fourth fiscal quarter of each fiscal
year, a Compliance Certificate executed by an Authorized Signatory who is a senior
financial officer of Borrower.



     2.5 Amendment to Article VII.



     Article VII is amended by adding:




     7.17 Activities of Affirmative Trust I. Neither Borrower nor any of its
Subsidiaries shall permit Affirmative Trust I to engage in any business activity
other than as described in the Affirmative Trust I Declaration of Trust (as such
agreement existed on December 21, 2004).




     7.18 Activities of Affirmative Trust II. Neither Borrower nor any of its
Subsidiaries shall permit Affirmative Trust II to engage in any business activity
other than as described in the Affirmative Trust II Declaration of Trust (as such
agreement existed on June 1, 2005).



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     7.19 2004 Documents. Borrower shall not, and shall not permit any of its
Subsidiaries to, change, amend or restate (or take any action or fail to take any
action the result of which is an effective amendment, change or restatement) or
accept any waiver or consent with respect to, any 2004 Document, that would result
in (a) an increase in the principal, interest, overdue interest, fees or other
amounts payable under any 2004 Document, (b) an acceleration of any date fixed for
payment or prepayment of principal, interest, fees or other amounts payable under
any 2004 Document (including, without limitation, as a result of any redemption),
(c) a change in any of the subordination provisions of any 2004 Document, or (d) any
other change in any term or provision of any 2004 Document that could reasonably be
expected to have an adverse effect on the interest of Lenders, Administrative Agent
or L/C Issuer.




     7.20 2005 Documents. Borrower shall not, and shall not permit any of its
Subsidiaries to, change, amend or restate (or take any action or fail to take any
action the result or which is an effective amendment, change or restatement) or
accept any waiver or consent with respect to, any 2005 Document, that would result
in (a) an increase in the principal, interest, overdue interest, fees or other
amounts payable under any 2005 Document, (b) an acceleration of any date fixed for
payment or prepayment of principal, interest, fees or other amounts payable under
any 2005 Document (including, without limitation, as a result of any redemption),
(c) a change in any of the subordination provisions of any 2005 Document, or (d) any
other change in any term or provision of any 2005 Document that could reasonably be
expected to have an adverse effect on the interest of Lenders, Administrative Agent
or L/C Issuer.



     2.6 Amendment to Article IX .



     Article IX is amended by deleting “or” at the end of Section 9.1(l), by
deleting the period at the end of Section 9.1(m) and substituting “;” in lieu thereof, and
by adding the following:




     (n) 2004 Documents. Any Person who is a holder of, or claims to act
for the benefit of any holder of, any equity security or Debt of Affirmative Trust
I, any 2004 Debenture, any 2004 Preferred Security, the 2004 Guaranty, or any other
2004 Document shall assert that any obligation under any 2004 Document is not
subordinate in any respect to the Obligations; any payment or transfer of property
shall be made under any 2004 Document (other than payment of regularly scheduled
cash interest payments in accordance with the 2004 Debentures and 2004 Preferred
Securities (as such agreements existed on December 21, 2004) if no Default or Event
of Default exists prior to or after giving effect to such payment); a default shall
occur under any 2004 Document; or the 2004 Indenture, 2004 Debentures or 2004
Preferred Securities shall benefit from any collateral (including any sinking fund
or similar deposit arrangement) or guarantee (except, with respect to the 2004
Preferred Securities, only, the 2004 Guaranty); or



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     (o) 2005 Documents. Any Person who is a holder of, or claims to act
for the benefit of any holder of, any equity security or Debt of Affirmative Trust
II, any 2005 Debenture, any 2005 Preferred Security, the 2005 Guaranty, or any other
2005 Document shall assert that any obligation under any 2005 Document is not
subordinate in any respect to the Obligations; any payment or transfer of property
shall be made under any 2005 Document (other than payment of regularly scheduled
cash interest payments in accordance with the 2005 Debentures and 2005 Preferred
Securities (as such agreements existed on June 1, 2005) if no Default or Event of
Default exists prior to or after giving effect to such payment); a default shall
occur under any 2005 Document; or the 2005 Indenture, 2005 Debentures or 2005
Preferred Securities shall benefit from any collateral (including any sinking fund
or similar deposit arrangement) or guarantee (except, with respect to the 2005
Preferred Securities, only, the 2005 Guaranty).



     2.7 Amendment to Exhibit H (Compliance Certificate).



     Exhibit H is deleted in its entirety and a new Exhibit H, in the form of
Exhibit H hereto, is substituted in lieu thereof.



     2.8 Amendment to Schedule 8.18 (Existing Investments).



     Schedule 8.18 is deleted in its entirety and a new Schedule 8.18, in the form
of Schedule 8.18 hereto, is substituted in lieu thereof.



     2.9 Effectiveness. Subject to Sections 4.1 and 5.2, the amendments
provided for in Sections 2.1(a) and (b) and 2.5 shall be effective as of March 31,
2005 and all other amendments shall be effective on the date the conditions precedent in
Article IV are satisfied.



ARTICLE III




Waivers




     3.1 Credit Agreement Provisions; Existing Defaults.




     (a) Credit Agreement Section 7.6 provides that Borrower will not be liable in
any manner in respect of any Debt, except Permitted Debt.




     (i) Borrower has guaranteed the obligations of Fed USA Franchising, Inc., a
Florida corporation (“Fed Franchising”), and Fed USA Retail, Inc., a Florida
corporation (“Fed Retail”), pursuant to the Asset Purchase Agreement dated as of
December 21, 2004 (“Fed Purchase Agreement”), among Fed Franchising, Fed Retail,
Assurance Managing General Agents, Inc., 21st Century Holding Company,
Federated Agency Group, Inc. and Fed USA, Inc. Such guaranty of Borrower is not
included in Permitted Debt and is an Event of Default.



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     (ii) Borrower has guaranteed certain obligations of Affirmative Trust I
pursuant to the 2004 Guaranty. Such guaranty by Borrower is not included in
Permitted Debt and is an Event of Default.




     (iii) Borrower has entered into the 2004 Indenture and issued the 2004
Debentures. Such Debt is not Permitted Debt and is an Event of Default.




     (iv) Borrower has guaranteed certain obligations of Affirmative Trust II
pursuant to the 2005 Guaranty. Such guaranty by Borrower is not included in
Permitted Debt and is an Event of Default.




     (v) Borrower has entered into the 2005 Indenture and issued the 2005
Debentures. Such Debt is not Permitted Debt and is an Event of Default.




     (vi) American Agencies General Agency, Inc. (“AAGA”), Borrower and IPA, LLC
have entered into the Asset Purchase and Sale Agreement dated effective as of July
1, 2005 (“IPA Purchase Agreement”). Pursuant to the IPA Purchase Agreement,
Borrower has guaranteed certain obligations of AAGA. Such guaranty by Borrower is
not included in Permitted Debt and is an Event of Default.




     (b) Credit Agreement Section 7.10 provides that Borrower will not, and will not
permit any of its Subsidiaries to, create or permit any Lien upon any of its property,
except Permitted Liens. A-Affordable Insurance Agency, Inc. (“AAIA”) and BW Insurance
Agency, Inc. (“BW”) have entered into the Asset Purchase and Sale Agreement dated effective
as of January 1, 2005 (“BW Purchase Agreement”). AAIA has executed the Security Agreement
dated effective as of January 1, 2005, granting to BW a security interest to secure
performance of AAIA’s obligations pursuant to the BW Purchase Agreement. Such security
interest is not a Permitted Lien and is an Event of Default.




     (c) Credit Agreement Section 7.10 provides that Borrower will not, and will not
permit any of its Subsidiaries to, acquire assets of any Person or create any Subsidiary,
except Permitted Acquisitions and the creation of new Subsidiaries in accordance with
Section 7.10.




     (i) USA Franchising and USA Retail acquired assets of another Person pursuant
to the Fed Purchase Agreement, which acquisition is not a Permitted Acquisition
because Borrower did not deliver to Administrative Agent all documents required by
Section 7.10, Defaults and Events of Default existed prior to and after
giving effect to the acquisition, Borrower did not deliver to Administrative Agent a
pro forma Compliance Certificate, and the cash portion of the consideration for such
acquisition was greater than $5,000,000. Such acquisition and failure to comply
with Section 7.10 are an Event of Default.




     (ii) AAIA acquired assets of another Person pursuant to the BW Purchase
Agreement, which acquisition is not a Permitted Acquisition because Defaults and
Events of Default existed prior to and after giving effect to the acquisition. Such
acquisition is an Event of Default.



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     (iii) AAGA acquired assets of another Person pursuant to the IPA Purchase
Agreement, which acquisition is not a Permitted Acquisition because Defaults and
Events of Default existed prior to and after giving effect to the acquisition. Such
acquisition is an Event of Default.




     (iv) AAIA acquired assets of another Person pursuant to the Asset Purchase and
Sale Agreement dated effective as of February 1, 2005 between AAIA and AEA Insurance
Agencies, Inc., which acquisition is not a Permitted Acquisition because Defaults
and Events of Default existed prior to and after giving effect to the acquisition.
Such acquisition is an Event of Default




     (d) Credit Agreement Section 7.10 provides actions that must be taken and
documents that must be delivered to Administrative Agent by Borrower with respect to the
creation of a new Subsidiary. Borrower has not complied with the provisions of Section
7.10 with respect to the creation of USA Franchising and USA Retail. Such failure is an
Event of Default.




     (e) Credit Agreement Section 7.12 provides that Borrower will not, and will not
permit any of its Subsidiaries to, make any Investment except Permitted Investments and
acquisitions permitted by Section 7.10.




     (i) The creation of Fed Franchising and Fed Retail and the acquisition of
assets pursuant to the Fed Purchase Agreement were not in compliance with
Section 7.10. Failure to comply with Section 7.12 is an Event of
Default.




     (ii) Borrower acquired common stock of Affirmative Trust I for $928,000. The
acquisition of the common stock of Affirmative Trust I is not a Permitted
Investment. Failure to comply with Section 7.12 is an Event of Default.




     (iii) Borrower acquired common stock of Affirmative Trust II for $774,000. The
acquisition of the common stock of Affirmative Trust II is not a Permitted
Investment. Failure to comply with Section 7.12 is an Event of Default.




     (f) Credit Agreement Section 7.12 provides that Borrower will not, and will not
permit any of its Subsidiaries to, make any Investment except Permitted Investments and
acquisitions permitted by Section 7.10. Credit Agreement Section 7.15
provides that Borrower will not, and will not permit any of its Subsidiaries to, carry on
any transaction with any of their respective Affiliates except at arm’s length and in the
ordinary course of business. Borrower has entered into the Stock Purchase Agreement dated
as of May 19, 2005 (such agreement, together with all amendments and restatements, the “2005
Stock Purchase Agreement”), between Borrower and Vesta Insurance Group, Inc., a Delaware
corporation (“Vesta”), pursuant to which Borrower has purchased 2,000,000 shares of common
stock of Borrower owned by Vesta. Vesta is an Affiliate of Borrower. The purchase of
common stock of Borrower pursuant to the 2005 Stock Purchase Agreement is not a Permitted
Investment and is not in the ordinary course of business of Borrower. Failure to comply
with Sections 7.12 and 7.15 is an Event of Default.



12









 





     3.2 Existing Defaults. Each of the Defaults and Events of Default described in
Section 3.1 is an “Existing Default”.



     3.3 Waivers.




     (a) Existing Defaults. Subject to the effectiveness of this First Amendment,
Lender and L/C Issuer hereby waive the Existing Defaults.




     (b) Limited Waivers. The waivers provided in Section 3.3(a) do not
constitute a waiver of any other requirement of any Loan Document or of any Default or Event
of Default (except the Existing Defaults), now or hereafter existing, under the Credit
Agreement or any other Loan Document, except as specifically waived hereby.



ARTICLE IV




Conditions Precedent




     4.1 Conditions. The effectiveness of this First Amendment is subject to the
satisfaction of the following conditions precedent:




     (a) Documents. Administrative Agent shall have received all of the following,
each dated (unless otherwise indicated) the date of this First Amendment, and the following
shall have occurred, in form and substance satisfactory to Administrative Agent:




     (i) This First Amendment executed by Borrower, each other Obligor, Lender and
L/C Issuer.




     (ii) Pro forma Compliance Certificate, prepared after giving effect to the
transactions subject to the Fed Purchase Agreement, 2004 Documents, 2005 Documents
and 2005 Stock Purchase Agreement.




     (iii) A certificate of officers acceptable to Administrative Agent of Fed
Franchising certifying as to (A) the incumbency of the officers signing such
certificate and the Loan Documents to which it is a party, (B) an original certified
copy of its Articles of Incorporation or Certificate of Incorporation, as
applicable, certified as true, complete and correct by the appropriate authority of
its state of incorporation as of a date not more than ten days prior to the date
such certificate is delivered to Administrative Agent, (C) a copy of its By-Laws, as
in effect on the date such certificate is delivered to Administrative Agent, (D) a
copy of the resolutions of the appropriate governance board authorizing it to
execute, deliver and perform the Loan Documents to which it is a party, and (E) an
original certificate of good standing and existence issued by the appropriate
authority of its state of organization (certified as of a date not more than ten
days prior to the date such certificate is delivered to Administrative Agent).




     (iv) A certificate of officers acceptable to Administrative Agent of Fed Retail
certifying as to (A) the incumbency of the officers signing such certificate



13









 






and the Loan Documents to which it is a party, (B) an original certified copy
of its Articles of Incorporation or Certificate of Incorporation, as applicable,
certified as true, complete and correct by the appropriate authority of its state of
incorporation as of a date not more than ten days prior to the date such certificate
is delivered to Administrative Agent, (C) a copy of its By-Laws, as in effect on the
date such certificate is delivered to Administrative Agent, (D) a copy of the
resolutions of the appropriate governance board authorizing it to execute, deliver
and perform the Loan Documents to which it is a party, and (E) an original
certificate of good standing and existence issued by the appropriate authority of
its state of organization (certified as of a date not more than ten days prior to
the date such certificate is delivered to Administrative Agent).




     (v) Searches of the Uniform Commercial Code, Tax lien and other records as
Administrative Agent may require.




     (vi) Opinions of counsel to Borrower, Fed Franchising and Fed Retail addressed
to Administrative Agent, L/C Issuer and Lenders and covering such matters incident
to such new Subsidiaries and the Loan Documents as Administrative Agent or Special
Counsel may reasonably request.




     (vii) In form and substance satisfactory to Administrative Agent and Special
Counsel, such other documents, instruments and certificates as Administrative Agent,
L/C Issuer and any Lender may reasonably require in connection with the formation of
Fed Franchising and Fed Retail.




     (b) No Default. No Default or Event of Default shall exist (other than the
Existing Defaults).




     (c) Representations and Warranties.




     (i) All of the representations and warranties contained in Article VIII
of the Credit Agreement, as amended hereby, and in the other Loan Documents shall be
true and correct on and as of the date of this First Amendment with the same force
and effect as if such representations and warranties had been made on and as of such
date, except (A) to the extent such representations and warranties speak to a
specific date and (B) for the Existing Defaults.




     (ii) All of the representations and warranties contained in Article VI
shall be true and correct, both before and after giving effect to this First
Amendment.



     4.2 Expenses of Administrative Agent. As provided in the Credit Agreement, Borrower
shall pay on demand all reasonable costs and expenses incurred by Administrative Agent in
connection with the preparation, negotiation, and execution of this First Amendment and the other
Loan Documents executed pursuant hereto, including without limitation the reasonable fees and
expenses of Administrative Agent’s legal counsel.



14









 





ARTICLE V




Ratification




     5.1 Ratification. The terms and provisions set forth in this First Amendment shall
modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and
except as expressly modified and superseded by this First Amendment, the terms and provisions of
the Credit Agreement and the other Loan Documents are ratified and confirmed and shall continue in
full force and effect. Each Obligor agrees that the Credit Agreement, as amended hereby, and the
other Loan Documents to which it is a party or subject shall continue to be legal, valid, binding
and enforceable in accordance with their respective terms.



ARTICLE VI




Representations and Warranties




     6.1 Representations and Warranties.




     (a) Loan Documents. Each Obligor hereby represents and warrants to
Administrative Agent, Lender and L/C Issuer that (i) the execution, delivery and performance
of this First Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite action on the part of such Obligor
and will not violate any organizational document of such Obligor, (b) the representations
and warranties contained in the Credit Agreement, as amended hereby, and each other Loan
Document are true and correct on and as of the date hereof as though made on and as of the
date hereof, except to the extent such representations and warranties speak to a specific
date, (c) no Default or Event of Default exists (other than the Existing Defaults), and (d)
such Obligor is in full compliance with all covenants and agreements contained in the Credit
Agreement, as amended hereby, and the other Loan Documents to which it is a party or it or
its property is subject.




     (b) 2004 Documents. Attached as Exhibit A are true and correct copies
of the Affirmative Trust I Declaration of Trust, the 2004 Indenture, the 2004 Guaranty, and
all exhibits and schedules to such agreements. There are no agreements between or among any
of the parties to such agreements, any holder of any equity security or Debt of Affirmative
Trust I, any trustee of Affirmative Trust I, any holder of any 2004 Debenture or any other
Person, or their respective Affiliates, related to the subject matter of such agreements not
contained in the documents attached as Exhibit A.




     (c) Subordination; 2004 Documents. The principal and interest on the 2004
Debentures and all obligations of Borrower and each of its Subsidiaries in respect of and
under the 2004 Debentures, the 2004 Indenture, the 2004 Preferred Securities, the
Affirmative Trust I Declaration of Trust and the 2004 Guaranty are subordinate in all
respects to all of the Obligations. No redemption, purchase, Dividend, payment,
distribution or other transfer of property shall be made to or for the benefit of any holder
of or in respect of any equity security or Debt of Affirmative Trust I, the 2004



15









 






Debentures, the 2004 Indenture, the 2004 Preferred Securities, the Affirmative Trust I
Declaration of Trust or the 2004 Guaranty other than, if a Default or Event of Default does
not exist prior or after giving effect thereto, payments of regularly scheduled cash
interest payments in respect of the 2004 Debentures by Borrower and payments of regularly
scheduled cash interest payments in respect of 2004 Preferred Securities by Affirmative
Trust I. No obligations under any 2004 Document benefits from any collateral (including any
sinking fund or similar deposit arrangement) or guaranty (except, with respect to the 2004
Preferred Securities, only, the 2004 Guaranty).




     (d) 2005 Documents. Attached as Exhibit B are true and correct copies
of the Affirmative Trust II Declaration of Trust, the 2005 Indenture, the 2005 Guaranty, and
all exhibits and schedules to such agreements. There are no agreements between or among any
of the parties to such agreements, any holder of any equity security or Debt of Affirmative
Trust II, any trustee of Affirmative Trust II, any holder of any 2005 Debenture or any other
Person, or their respective Affiliates, related to the subject matter of such agreements not
contained in the documents attached as Exhibit B.




     (e) Subordination; 2005 Documents. The principal and interest on the 2005
Debentures and all obligations of Borrower and each of its Subsidiaries in respect of and
under the 2005 Debentures, the 2005 Indenture, the 2005 Preferred Securities, the
Affirmative Trust II Declaration of Trust and the 2005 Guaranty are subordinate in all
respects to all of the Obligations. No redemption, purchase, Dividend, payment,
distribution or other transfer of property shall be made to or for the benefit of any holder
of or in respect of any equity security or Debt of Affirmative Trust II, the 2005
Debentures, the 2005 Indenture, the 2005 Preferred Securities, the Affirmative Trust II
Declaration of Trust or the 2005 Guaranty other than, if a Default or Event of Default does
not exist prior or after giving effect thereto, payments of regularly scheduled cash
interest payments in respect of the 2005 Debentures by Borrower and payments of regularly
scheduled cash interest payments in respect of 2005 Preferred Securities by Affirmative
Trust II. No obligations under any 2005 Document benefits from any collateral (including
any sinking fund or similar deposit arrangement) or guaranty (except, with respect to the
2005 Preferred Securities, only, the 2005 Guaranty).




     (f) 2005 Stock Purchase Agreement. Attached as Exhibit C is a true and
correct copy of the 2005 Stock Purchase Agreement, and all exhibits and schedules to such
agreement. There are no agreements between or among any of the parties to such agreement,
any holder of any equity security Borrower or any other Person, or their respective
Affiliates, related to the subject matter of such agreement not contained in the documents
attached as Exhibit C.



ARTICLE VII




Miscellaneous




     7.1 Reference to Credit Agreement. Each of the Loan Documents, including the Credit
Agreement and any and all other agreements, documents, or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Credit



16









 




Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents
to the Credit Agreement shall mean a reference to the Credit Agreement as amended hereby.




     7.2 Severability. The provisions of this First Amendment are intended to be
severable. If for any reason any provision of this First Amendment shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.



     7.3 Counterparts. This First Amendment may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument, and any party hereto may
execute this First Amendment by signing any such counterpart.



     7.4 INTEGRATION. THIS FIRST AMENDMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.



     7.5 GOVERNING LAW. THIS FIRST AMENDMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.






The Remainder of This Page Is Intentionally Left Blank.







17









 





     Executed as of the date first written above.



	 	 	 	 	 
	BORROWER:	 	AFFIRMATIVE INSURANCE HOLDINGS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/David Snyder
	 

	 	 	 	 
	 	 	Print Name: David Snyder
	 	 	Print Title: Senior Vice President/General Counsel/Secretary
	 
	 	 	 	 
	RICS:	 	AFFIRMATIVE INSURANCE COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/David Snyder
	 

	 	 	 	 
	 	 	Print Name: David Snyder
	 	 	Print Title: Senior Vice President/General Counsel/Secretary
	 
	 	 	 	 
	 	 	INSURA PROPERTY AND CASUALTY INSURANCE COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/David Snyder
	 

	 	 	 	 
	 	 	Print Name: David Snyder
	 	 	Print Title: Senior Vice President/General Counsel/Secretary






 









 






	 	 	 	 	 
	ADMINISTRATIVE AGENT,

LENDER AND L/C ISSUER:	 	THE FROST NATIONAL BANK, as Administrative Agent, Lender and L/C Issuer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Stephen S. Martin
	 

	 	 	 	 
	 	 	Print Name: Stephen S. Martin
	 	 	Print Title: Vice President






 









 






	 	 	 	 	 
	OTHER OBLIGORS:	 	 
	 
	 	 	 	 
	A-AFFORDABLE INSURANCE AGENCY, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder
 

	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	A-AFFORDABLE LOCATIONS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	A-AFFORDABLE MANAGING GENERAL AGENCY, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AFFIRMATIVE ALTERNATIVE DISTRIBUTION, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AFFIRMATIVE FRANCHISES, INC.	 	 
	 
	 	 	 	 
	By

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 






 









 






	 	 	 	 	 
	AFFIRMATIVE INSURANCE SERVICES, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AFFIRMATIVE INSURANCE SERVICES OF SOUTH CAROLINA, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AFFIRMATIVE MANAGEMENT SERVICES, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AFFIRMATIVE PROPERTY HOLDINGS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AFFIRMATIVE RETAIL, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AFFIRMATIVE SERVICES, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 






 









 






	 	 	 	 	 
	AFFIRMATIVE SERVICES RETAIL, INC.	 	 
	 
	 	 	 	 
	By: 

	/s/David Snyder	 	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AFFIRMATIVE UNDERWRITING SERVICES, INC.	 	 
	 
	 	 	 	 
	By: 

	/s/David Snyder	 	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AMERICAN AGENCIES GENERAL AGENCY, INC.

	 	 
	 
	 	 	 	 
	By: 

	/s/David Snyder	 	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AMERICAN AGENCIES INSURANCE GROUP, INC.	 	 
	 
	 	 	 	 
	By: 

	/s/David Snyder	 	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	AMERICAN AGENCIES INSURANCE SERVICES OF LOUISIANA, INC.	 	 
	 
	 	 	 	 
	By: 

	/s/David Snyder	 	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 






 









 






	 	 	 	 	 
	AMERICAN AGENCIES INVESTMENTS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	DRIVER’S CHOICE INSURANCE AGENCIES, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	DRIVER’S CHOICE INSURANCE SERVICES, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name:David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	FED USA FRANCHISING, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	FED USA RETAIL, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 






 









 






	 	 	 	 	 
	INSTANT AUTO INSURANCE AGENCY OF ARIZONA, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	INSTANT AUTO INSURANCE AGENCY OF COLORADO, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	INSTANT AUTO INSURANCE AGENCY OF INDIANA, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	INSTANT AUTO INSURANCE AGENCY OF NEW MEXICO, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	INSUREONE INDEPENDENT INSURANCE AGENCY, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 
	 
	 	 	 	 
	SPACE COAST HOLDINGS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary	 	 






 









 






	 	 	 	 	 
	YELLOW KEY INSURANCE AGENCY, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/David Snyder	 	 
	 

	 	 	 	 
	Print Name: David Snyder	 	 
	Print Title: Senior Vice President/General Counsel/Secretary