exv10w11






Exhibit 10.11




REVOLVING LINE OF CREDIT NOTE




			
	$15,000,000.00
	 	April 6, 2009






     FOR VALUE RECEIVED, FORTEGRA FINANCIAL CORPORATION, a Georgia corporation, as maker, having
an address of 100 West Bay Street, Jacksonville, Florida 32231 (“Borrower”), hereby
unconditionally promises to pay to the order of COLUMBUS BANK AND TRUST COMPANY, a Georgia banking
corporation, having its principal place of business at 1148 Broadway, Columbus, Georgia 31901
(“Lender”), or at such other place as the holder hereof may from time to time designate in writing,
the principal sum of FIFTEEN MILLION AND 00/100THS DOLLARS ($15,000,000.00), or such sums as may be
advanced and outstanding from time to time pursuant to the Loan Agreement (defined below), in
lawful money of the United States of America, with interest thereon as herein provided, to be paid
as provided herein.



     This Revolving Line of Credit Note (the “Note”) represents a loan made on a revolving credit
basis pursuant to that certain Line of Credit Agreement dated of even date herewith by and among
Borrower, LOTS Intermediate Co., as guarantor, and Lender(such Line of Credit Agreement as
originally executed and as same may be amended and modified from time to time being herein referred
to as the “Loan Agreement”). Advances of principal made hereunder shall be made by Lender to
Borrower in such amounts and at such times as Borrower from time to time may request in accordance
with and subject to the terms of and conditions and limitations set forth in the Loan Agreement,
but in no event shall the aggregate amount of all advances (including, without limitation, the
initial advance made on the date hereof) of principal made and outstanding at any one time
hereunder ever exceed $15,000,000.00. Notwithstanding anything herein or in the Loan Agreement to
the contrary, Lender shall have no obligation to advance any funds hereunder if (a) an Event of
Default (as hereinafter defined) has occurred and is continuing or (b) on or after the Maturity
Date (as hereinafter defined).



1. CERTAIN DEFINED TERMS




     As used herein the following terms shall have the meanings set forth below (terms utilized
herein which are not defined herein but which are defined in the Loan Agreement shall have the
meanings ascribed to such terms in the Loan Agreement):



     (a) “Applicable Interest Rate” shall mean a per annum rate of simple interest equal at all
times to the greater of (i) 1.0% plus the Floating Prime Rate (as hereinafter defined) and (ii)
5.0%. Each time the Floating Prime Rate increases or decreases, the Applicable Interest Rate will
be re-calculated by Lender effective on the date when any increase or decrease in the Floating
Prime Rate becomes effective so that the Applicable Interest Rate will equal the greater of (i)
1.0% plus the Floating Prime Rate, in effect following such increase or decrease and (ii) 5.0%.
As of the date hereof, the Floating Prime Rate is 3.25% per annum and accordingly the initial
Applicable Interest Rate is 5.0% per annum.



 









 





     (b) “Floating Prime Rate” shall mean the rate announced or otherwise designated from time to
time by Lender as its “Prime Rate” and changing automatically with changes in such Prime Rate.
Borrower acknowledges that the Prime Rate announced or otherwise established by Lender from time to
time merely serves as a basis upon which effective rates of interest are calculated for loans
making reference thereto and that such Prime Rate may not be the lowest rate at which interest is
calculated or credit extended. If Lender ceases to announce its Prime Rate, Lender shall
determine the Floating Prime Rate as the Prime Rate designated in such other nationally recognized
publication, statistical guide or information service as Lender may reasonably select.



     (c) “Loan” shall mean the loan evidenced by this Note.



     (d) “Loan Agreement” shall have the meaning assigned to said term on the first page of this
Note.



     (e) “Loan Documents” shall mean this Note, the Loan Agreement, the Loan Documents (as defined
in the Loan Agreement), and any other documents or instruments which now or shall hereafter wholly
or partially secure or guarantee payment of this Note or which have otherwise been executed by
Borrower and/or any other person in connection with the Loan, and all amendments, modifications and
extensions of any such agreements, documents or instruments.



     (f) “Maturity Date” shall mean March 31, 2010.



     (g) “Monthly Payment Date” shall mean May 10, 2009, and the tenth (10th)
day of each successive month thereafter through and including the Maturity Date.



2. PAYMENT TERMS




     Principal and interest on this Note shall be due and payable as follows:



     (c) The principal amount of this Note from time to time advanced and outstanding shall bear
interest at the Applicable Interest Rate in effect from time to time.



     Accrued interest shall be due and payable from Borrower to Lender on each Monthly Payment
Date through and including the Maturity Date.



     (b) Each payment from Borrower shall be applied when received by Lender as follows: (i) first,
to any amounts due hereunder that are neither principal nor interest, (ii) second, to the payment
of interest which has accrued but has not been paid hereunder, and (iii) the balance toward the
reduction of the principal sum in such order of application as is determined by Lender.



     (c) The entire outstanding balance of the principal sum and all accrued but unpaid interest
thereon and the entire Debt (as hereinafter defined) shall be due and payable from Borrower
hereunder in full on the Maturity Date.



 









 





     (d) Interest shall be computed for each day during the term of this Note by multiplying the
outstanding principal balance hereunder at the close of business on that day by a daily interest
factor which daily interest factor shall be calculated by dividing the interest rate per annum in
effect under this Note on that day by 360 days. Interest so computed shall accrue for each and
every day on which any principal amount remains outstanding hereunder.



     (e) Unless payments are made in the required amount in immediately available funds at the
place where this Note is payable, remittances in payment of all or any part of the Debt (defined
below) shall not, regardless of any receipt or credit issued therefor, constitute payment until the
required amount is actually received by Lender in funds immediately available at the place where
this Note is payable (or any other place as Lender, in Lender’s sole discretion, may have
established by delivery of written notice thereof to Borrower) and shall be made and accepted
subject to the condition that any check or draft may be handled for collection in accordance with
the practice of the collecting bank or banks.



3. DEFAULT AND ACCELERATION




     (a) The whole of the principal sum of this Note from time to time outstanding, (b) interest,
default interest, late charges and any and all such other sums, as provided in this Note or the
other Loan Documents, (c) all other monies agreed or provided to be paid by Borrower in this Note
or the other Loan Documents, (d) all sums advanced pursuant to and in accordance with any of the
Loan Documents to protect and preserve the Collateral securing the Loan, and (e) all sums advanced
and costs and expenses incurred by Lender in connection with the Debt (defined below) or any part
thereof, any renewal, extension, or change of or substitution for the Debt or any part thereof, or
the acquisition or perfection of the security therefor, whether made or incurred at the request of
Borrower or Lender [all the sums referred to in (a) through (e) above shall collectively be
referred to as the “Debt"] shall without notice become immediately due and payable at the option of
Lender (i) if any payment required in this Note is not paid on the date when due, (ii) if Borrower
fails to observe any other term or agreement herein contained, or (iii) on the occurrence and
continuation of any Event of Default under, and as defined in, the Loan Agreement or any of the
Loan Documents (each such nonpayment, failure or occurrence of an Event of Default under the Loan
Agreement or any of the Loan Documents being referred to as an “Event of Default”).



4. DEFAULT INTEREST




     Borrower hereby agrees that upon the occurrence and during the continuance of an Event of
Default, Lender shall be entitled to receive and Borrower shall pay interest on the entire unpaid
principal sum at a rate (the “Default Rate”) equal to the lesser of (i) 4.0% more than the
Applicable Interest Rate or (ii) the maximum interest rate that Borrower may by law pay. The
Default Rate shall be computed from the occurrence of the Event of Default until the earlier of the
date upon which the Event of Default is cured or waived in writing by Lender or the date upon which
the Debt is paid in full. Interest calculated at the Default Rate shall be added to the Debt.
This clause, however, shall not be construed as an agreement or privilege to extend the



3









 





date of the payment of the Debt, or as a waiver of any other right or remedy accruing to Lender by
reason of the occurrence of any Event of Default.




5. PREPAYMENT




     The indebtedness evidenced by this Note may be prepaid, in whole or in part, at any time and
from time to time, without penalty or premium.



6. SECURITY.




     This Note is secured by the Collateral. Payment of this Note is also guaranteed by LOTS
Intermediate Co. pursuant to the Guaranty.



7. SAVINGS CLAUSE




     No provisions of this Note are intended to result in Lender being entitled to or Borrower
being required to pay any interest in excess of the highest lawful Contract Rate (meaning the
maximum non-usurious interest rate that at any time or from time to time may be contracted for,
taken, reserved, charged or received on amounts due to Lender under laws applicable with regard to
this Note presently in effect, or to the extent permitted by law, under such applicable laws as
they are in effect from time to time which may allow a higher maximum non-usurious rate than
applicable laws now allow). To the extent the interest provided for herein shall exceed said
highest lawful Contract Rate, Borrower shall be obligated only to pay said highest lawful Contract
Rate and shall not be obligated to pay such excess, but if such excess shall be paid by Borrower,
then such excess shall, at the option of Lender, either be credited by Lender against the unpaid
principal balance hereof or refunded by Lender to Borrower.



8. LATE CHARGE




     Time is of the essence of all provisions of this Note. If any sum payable under this Note is
not paid prior to the tenth (10th) day after the date on which it is due, Borrower shall pay to
Lender upon demand an amount equal to the lesser of five percent (5%) of the unpaid sum or the
maximum amount permitted by applicable law to defray the expenses incurred by Lender in handling
and processing the delinquent payment and to compensate Lender for the loss of the use of the
delinquent payment and the amount shall be secured by the Pledge Agreement (as defined in the Loan
Agreement) and other instruments securing this Note. This provision shall not be deemed to create
a grace period for making payments under this Note and shall not preclude Lender from exercising
Lender’s rights under Section 3 of this Note.



9. NO ORAL CHANGE




     This Note may not be modified, amended, waived, extended, changed, discharged or



4









 





terminated orally or by any act or failure to act on the part of Borrower or Lender, but only by
an agreement in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.




10. WAIVERS




     Borrower and each of its successors and assigns do hereby severally waive presentment and
demand for payment, notice of dishonor, protest and notice of protest and non-payment and all other
notices of any kind, except for notices specifically provided for in the Loan Documents, and no
release of any security for the Debt or extension of time for payment of this Note or any
installment hereof, and no alteration, amendment or waiver of any provision of this Note or the
other Loan Documents agreed to by Lender or its successors or assigns, with any Person other than
Borrower (or its successors and/or assigns) shall release, modify, amend, waive, extend, change,
discharge, terminate or affect the liability of Borrower or any of its successors or assigns. No
notice to or demand on Borrower shall be deemed to be a waiver of the obligation of Borrower or of
the right of Lender to take further action without further notice or demand as provided for in this
Note or the other Loan Documents. In addition, acceptance by Lender of any payment in an amount
less than the amount then due shall be deemed an acceptance on account only, and shall not
constitute a waiver of any Event of Default that would otherwise arise as a result of such
nonpayment. If Borrower is a corporation, limited liability company or partnership, the agreements
contained herein shall remain in full force and effect and applicable notwithstanding any changes
in the shareholders or members or partners comprising, or the officers and directors or managers or
general partners relating to, the corporation, limited liability company or limited partnership,
and the term “Borrower” as used herein, shall include any successor corporation, limited
partnership or limited liability company, but no predecessor corporation or limited liability
company or limited partnership shall be relieved of liability hereunder. (Nothing in the foregoing
sentence shall be construed as consent to, or a waiver of, any prohibition or restriction on
transfers of interests in any limited partnership, corporation or limited liability company which
may be set forth in any of the Loan Documents).



11. TRANSFER




     Lender shall have the absolute right to sell, assign and transfer this Note and all of
Lender’s rights hereunder and under any or all of the Loan Documents. Upon the transfer of this
Note, Borrower hereby waiving notice of any such transfer, Lender may deliver all the collateral
mortgaged, granted, pledged or assigned pursuant to the Loan Documents, or any part thereof, to the
transferee who shall thereupon become vested with all the rights herein or under applicable law
given to Lender with respect thereto, and Lender shall thereafter forever be relieved and fully
discharged from any liability or responsibility in the matter; but Lender shall retain all rights
hereby given to it with respect to any liabilities and the collateral not so transferred.



12. WAIVER OF TRIAL BY JURY




5









 








     BORROWER AND LENDER HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN, THE APPLICATION FOR THE LOAN, THIS NOTE OR THE OTHER LOAN
DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS, MEMBERS, MANAGERS
OR AGENTS IN CONNECTION THEREWITH.



13. AUTHORITY




     Borrower (and the undersigned representative of Borrower, if any) represents that it has full
power, authority and legal right to execute and deliver this Note and the Loan Documents to which
Borrower is a party and that this Note and the Loan Documents to which Borrower is a party
constitute valid and binding obligations of Borrower, enforceable against Borrower in accordance
with their respective terms.



14. APPLICABLE LAW




     This Note shall be governed, construed, applied and enforced in accordance with the laws of
the state of Georgia and the applicable laws of the United States of America.



15. COUNSEL FEES




     In the event that it should become necessary to employ counsel to collect the Debt or to
protect or foreclose the security therefor, hereunder or under any of the other Loan Documents,
Borrower also agrees to pay all reasonable fees and expenses of Lender, including, without
limitation, reasonable attorney’s fees actually incurred for the services of such counsel, whether
or not suit be brought.



16. NOTICES




     Any and all notices, elections or demands permitted or required to be made under this Note
shall be in writing, signed by the party giving such notice, election or demand and shall be
delivered personally, by electronic email, or sent by certified United States Mail, postage
prepaid, or sent by a nationally recognized overnight courier provided a receipt for delivery is
obtained from the recipient, to the other party at the address set forth below, or at such other
address within the continental United States of America as may have theretofore been designated in
writing to the other party. Any such notice or other document shall be deemed delivered (i) if
personally delivered, when actually received by the party to whom directed at the address specified
pursuant to this Section, or (ii) if sent by electronic mail, upon sender’s receipt of an
acknowledgment from the intended recipient (such as by the “return receipt requested” function, as
available, return email or written acknowledgment), or (iii) if sent by U.S. Mail, three (3) days
after such notice or document is deposited in the United States Mail, addressed as provided



6









 





above, or (iv) if sent by overnight courier, addressed, as provided below, on the date of receipt
or refusal to accept delivery, as evidenced on the return receipt or other shipping invoice. For
the purposes of this Note:



If to Borrower:





Fortegra Financial Corporation

Attn: John Short

100 West Bay Street

P. O. Box 44130

Jacksonville, Florida 32231

jshort@fortegra.com






If to Lender:






Columbus Bank and Trust Company

Attn: Corporate Lending (Neill Hatcher)

1148 Broadway (31901)

Post Office Box 120

Columbus, Georgia 31902

neillhatcher@columbusbankandtrust.com



17. MISCELLANEOUS




     (a) Wherever pursuant to this Note (i) Lender exercises any right given to it to approve or
disapprove, (ii) any arrangement or term is to be satisfactory to Lender, or (iii) any other
decision or determination is to be made by Lender, the decision of Lender to approve or disapprove,
all decisions that arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Lender, shall be in the discretion of Lender reasonably
exercised and shall be final and conclusive, except as may be otherwise expressly and specifically
provided herein.



     (b) Whenever used, the singular shall include the plural, the plural shall include the
singular, and the words “Lender“and “Borrower” shall include their respective successors, assigns
and legal representatives. This Note is not assignable by Borrower without the express prior
written consent of Lender, which consent may be withheld in sole and absolute discretion of Lender.



     (c) If any provision in this Note shall be found to be invalid, illegal or unenforceable by a
court of competent jurisdiction, it is the intention of the Borrower and Lender that to the



7









 





extent permitted by law, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.




[SIGNATURE PAGE FOLLOWS]




8









 








     IN WITNESS WHEREOF, Borrower has duly executed and delivered this Note, under seal, as of
the day and year first above written.



	 	 	 	 	 
	 	BORROWER:





FORTEGRA FINANCIAL CORPORATION, a

Georgia corporation

 	 
	 	By:  	/s/ Richard S. Kahlbaugh
 	 
	 	 	Name:  	Richard S. Kahlbaugh 	 
	 	 	Title:  	Chief Executive Officer and 

President 	 
	 



(CORPORATE SEAL)





9