Document:

exv10w1w39

 

EXHIBIT
10.1.39

FIRST AMENDMENT TO AMENDED AND RESTATED SUBORDINATED LOAN AND

SECURITY AGREEMENT

     THIS FIRST AMENDMENT TO SUBORDINATED LOAN AND SECURITY AGREEMENT (“First
Amendment”), dated as of November 12, 2004, by and among (1)(a) COURTNEY SMITH,
PETER JOKIEL, WILLIAM LODER and GARY FERGUSON, each an individual (each a
“Subordinated Lender” and, together, the “Subordinated Lenders”); and (2)
SPECIALTY UNDERWRITERS’ ALLIANCE, INC, a Delaware corporation, as the borrower
(the “Borrower”); and (3)(a) FRIEDMAN, BILLINGS, RAMSEY GROUP, INC., a Virginia
corporation, as a senior lender (“FBR”), and (b) STANDARD AMERICAN INSURANCE
LIMITED, a Bermuda company, as a senior lender (“SAIL,” and together with FBR,
the “Senior Lenders”), recites and provides as follows:

     WHEREAS, the Subordinated Lenders, the Borrower and the Senior Lenders are
parties to an Amended and Restated Subordinated Loan and Security Agreement,
dated as of July 23, 2004 (the “Original Agreement”);

     WHEREAS, the closing date for the Borrower’s Qualified Equity Offering is
imminent, and in order to facilitate the closing of such Qualified Equity
Offering, which is to the benefit of all parties to the Original Agreement, the
Borrower has requested the Subordinated Lenders to extend the Maturity Date to
December 15, 2004 and to relinquish their Warrants;

     WHEREAS, the Subordinated Lenders and the Senior Lenders have agreed to
these proposed modifications, on the terms and subject to the conditions set
forth herein, which include certain amendments to the terms of the Original
Agreement.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and promises made herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound hereby, the parties hereto agree as follows:

AGREEMENT:

     1. Capitalized Terms. Capitalized terms used herein but not
defined herein shall have the respective meanings set forth in the Original
Agreement.

     2. Relinquishment
of Warrants. Upon completion of an initial public offering of
equity securities by the Borrower pursuant to an effective
registration statement under the Securities Act in which the proceeds
to the Borrower are not less than $100,000,000 before deduction of
underwriting commissions and other offering expenses, the Warrants
issued to each Senior Lender shall automatically and without the need
for any further action be null and void.

     3. Extension of Maturity Date. Clause (i) in the definition of
“Maturity Date” is deleted and is restated to read “(i) December 15, 2004, as
the same may be extended pursuant to the terms hereof.”

     4. Payment
of FBR Note in Borrower Stock.  The following is hereby added to the Loan Agreement as a new Section 2.05(c):

     (c)       Option to
Pay Obligations to FBR and SAIL in Common Stock.  If the Maturity Date occurs on
the closing date for a Qualified Equity Offering, then the Borrower shall pay
all Obligations owed to each of FBR and SAIL by delivering to each of FBR and SAIL a number of shares of Common
Stock equal to the number of shares that could be purchased in the Qualified
Equity Offering (assuming no underwriter fees, placement agent fees or other
similar fees are payable in connection with such offering) for the total
dollar amount of the Obligations owing to each of FBR and SAIL as a Senior Lenders.

     5. Counterparts. This First Amendment may be executed in any
number of counterparts, each of which, when executed and delivered, shall be
deemed an original and all of

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which counterparts, taken together, shall constitute but one and the same
instrument with the same force and effect as if the signatures of all of the
parties were on a single counterpart.

     6. Entire Agreement; Governing Law. This First Amendment and the
Original Agreement constitute the entire agreement of the parties with respect
to the subject matter hereof. To the extent any representation, warranty,
covenant or other agreement in the Original Agreement is inconsistent with any
representation, warranty, covenant or other agreement contained in this First
Amendment, the provisions of this First Amendment shall control. THIS FIRST
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS AND DECISIONS OF THE COMMONWEALTH OF VIRGINIA (WITHOUT
REFERENCE TO CONFLICT OF LAWS PRINCIPLES).

     7. Ratification of Original Agreement. Except with respect to the
matters expressly contemplated hereby, the Original Agreement shall continue in
full force and effect in accordance with the provisions thereof, as in
existence on the date hereof.

     8. No Waiver. This First Amendment does not constitute a waiver of
any Default or Event of Default that currently exists or that may arise in the
future (other than nonpayment of the Subordinated Notes and all related
Obligations on October 31, 2004, the Maturity Date prior to the extension
thereof pursuant to this First Amendment), nor is it a waiver by any
Subordinated Lender of any right or remedy it has resulting from any Default or
Event of Default that currently exists or that may arise in the future. This
First Amendment also does not constitute an agreement by any Subordinated
Lender to consent to a breach of, or to waive, any provision of the Original
Agreement, this First Amendment or any other Significant Document in the
future.

     9. Costs and Expenses. All costs and expenses incurred by the
Subordinated Lenders in connection with the negotiation, execution and
enforcement of this First Amendment (including, without limitation, reasonable
legal fees and expenses incurred by the Subordinated Lenders) shall be borne
and paid by the Borrower, and each such item shall be paid by the Borrower
promptly upon presentation to the Borrower of an invoice therefor.

     10. Release of Claims. The Borrower and all of its successors and
assigns, each hereby forever releases, discharges and acquits the Subordinated
Lenders and all of the Subordinated Lenders’ respective parents, subsidiaries,
affiliates and shareholders, and all of the Subordinated Lenders’ and such
other entities’ respective affiliates, directors, officers, employees, agents,
subsidiaries and shareholders, and their respective successors, heirs and
assigns, and each of them, from and of any and all claims, demands,
obligations, liabilities, indebtedness, breaches of contract, breaches of duty
and any relationship, acts, omissions, misfeasance, malfeasance, cause or
causes of action, debts, sums of money, accounts, compensation, contracts,
controversies, promises, damages, costs, losses and expenses, of every type,
kind, nature, description or character, and irrespective of how, why, or by
reason of what facts, whether heretofore or now existing or arising, or which
could, might or may be claimed now to exist or arise, of whatever kind or
nature, whether known or unknown, suspected or unsuspected, liquidated or
unliquidated, each as though fully set forth herein at length and which

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in any way arise out of, or are connected with or relate to the Original
Agreement, this First Amendment or any other Significant Document.

[Signatures Begin on Next Page]

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     IN WITNESS WHEREOF, each of the Subordinated Lenders, the Borrower and
each of the Senior Lenders has caused this First Amendment to Amended and
Restated Subordinated Loan and Security Agreement to be executed by its duly
authorized officer, as of the date first above

	 	 	 	 	 	 	 
	 	 	 	 	SPECIALTY
UNDERWRITERS’
ALLIANCE, INC., Borrower
	 
	 	 	 	 	 	 
	
	 	 	 	By:	 	/s/ Courtney Smith
	
	 	 	 	 	 	
 
	
	 	 	 	Name:	 	Courtney Smith
	
	 	 	 	Title:	 	President
	 
	 	 	 	 	 	 
	SUBORDINATED LENDERS:	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Courtney Smith	 	/s/ William Loder
	
 	 	
 
	Courtney Smith	 	William Loder
	 
	 	 	 	 	 	 
	/s/ Peter Jokiel	 	/s/ Gary Ferguson
	
 	 	
 
	Peter Jokiel	 	Gary Ferguson
	 
	 	 	 	 	 	 
	FRIEDMAN, BILLINGS, RAMSEY

GROUP, INC., as Senior Lender	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Edward M. Wheeler	 	 	 	 
	

	 	
 	 	 	 	 
	Name:
	 	Edward M. Wheeler	 	 	 	 
	Title:
	 	Managing Director	 	 	 	 
	 
	 	 	 	 	 	 
	STANDARD AMERICAN INSURANCE
LIMITED,
Senior Lender	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ David Pickering	 	 	 	 
	

	 	
 	 	 	 	 
	Name:
	 	David Pickering	 	 	 	 
	Title:
	 	Director	 	 	 	 

[Signature Page to First Amendment to Amended and Restated Subordinated Loan and Security

Agreement]

4exv10w1w40

 

EXHIBIT 10.1.40

VOTING AGREEMENT

     THIS VOTING AGREEMENT (this “Agreement”), dated as of November ___, 2004,
is entered into Specialty Underwriters’ Alliance, Inc., a Delaware corporation
(the “Company”) and Friedman, Billings, Ramsey Group, Inc., a Virginia
corporation (“FBR Group”).

W I T N E S S E T H:

     WHEREAS, FBR Group desires to enter this voting agreement with the Company
with respect to any and all shares of Company Common Stock (as defined below)
held by FBR Group in excess of five percent (5%) of the outstanding shares of
Company Common Stock.

     NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:

     Section 1. Definitions. For purposes of this Agreement:

     “Affiliate” has the meaning specified in Rule 13e-3 promulgated
under the Securities Exchange Act of 1934, as amended.

     “Company” has the meaning shown above.

     “Company Common Stock” means the Company’s common stock, par value
$0.01 per share.

     “Expiration Date” means the earlier of (a) the date on which FBR
Group ceases to constructively or beneficially own any shares of Company Common
Stock and (b) a date not earlier than the second anniversary of the date of
this Agreement so specified by FBR Group by at least 75 days advance notice to
the Company; provided that, in respect of clause (b) and notwithstanding any
notice given by FBR Group, this Agreement shall not terminate on the proposed
Expiration Date if the effect of such termination would be to cause the
Company to be an Affiliate of FBR Group as of such proposed date..

     “FBR Group” has the meaning shown above.

     “FBR Group Shares” means the ___shares of Company Common Stock
owned by FBR Group on the date hereof, (b) any shares of Company Common Stock
distributed to FBR Group prior to the Expiration Date by reason of a stock
dividend, split-up, recapitalization, reclassification, combination, merger,
exchange of shares or otherwise and (c) any other shares of Company Common
Stock of which FBR Group has “beneficial ownership” (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) prior to the
Expiration Date.

     Section 2. Agreement to Vote Shares. Until the Expiration Date,
FBR Group shall, at any meeting of the holders of Company Common Stock, however
such meeting is called and regardless of whether such meeting is a special or annual
meeting of stockholders of the

 

 

Company, or at any adjournment thereof, or in
connection with any written consent of stockholders of the Company, vote, or
cause to be voted, the FBR Group Shares in excess of five percent (5%) of the
outstanding shares of Company Common Stock in the same proportion that the
Company’s other stockholders vote their shares of Company Common Stock with
respect to any proposal submitted to the Company’s stockholders for a vote, so
that, as a result, the percentage of the FBR Group Shares in excess of five
percent (5%) of the outstanding shares of Company Common Stock that are voted
in favor of such proposal shall equal the percentage of the outstanding shares
of Company Common Stock held by all other Company stockholders voted in favor
of such proposal and the percentage of the FBR Group Shares in excess of five
percent (5%) of the outstanding shares of Company Common Stock that are voted
against such proposal equals the percentage of the outstanding shares of
Company Common Stock held by all other Company stockholders voted against such
proposal.

     Section 3. Covenants of FBR Group. FBR Group hereby agrees and
covenants that, during the period from the date of this Agreement through the
Expiration Date,

     (a) Restrictions on Proxies and Voting Arrangements. FBR Group
shall not (i) grant any proxy, power-of-attorney or other authorization in or
with respect to the FBR Group Shares inconsistent with the provisions of
Section 2 or (ii) deposit any of the FBR Group Shares into a voting trust or
enter into a voting agreement or arrangement with respect to any of the FBR
Group Shares.

     (b) No Inconsistent Arrangements. FBR Group shall not take any
other action that would in any material way restrict, limit or interfere with
the performance of any of FBR Group’s obligations hereunder.

     Section 4. Representations and Warranties.

     (a) FBR Group hereby represents and warrants to the Company as follows:

         (i) No Inconsistent Proxies, Voting Trusts, Etc. FBR Group has not
(i) granted any proxy, power-of-attorney or other authorization in or with
respect to the FBR Group Shares or (ii) deposited any of the FBR Group Shares
into a voting trust or entered into a voting agreement or arrangement with
respect to any of the FBR Group Shares.

         (ii) Power; Binding Agreement. FBR Group has the power (or, if
applicable, corporate power) and authority to enter into and perform all of its
obligations hereunder, including, without limitation, the power and authority
to vote the FBR Group Shares in accordance with Section 2 hereof. The
execution, delivery and performance of this Agreement by FBR Group will not
violate any other agreement to which FBR Group is a party including, without
limitation, any voting agreement, proxy arrangement, pledge agreement,
stockholders agreement, voting trust or trust agreement. This Agreement has
been duly and validly executed and delivered by FBR Group, and constitutes a
valid and binding agreement of FBR Group, enforceable against the FBR Group in
accordance with its terms, except that (A) such enforcement may be subject to
applicable bankruptcy, insolvency, moratorium, or other similar laws, now or
hereafter in effect, affecting creditors’ rights generally and (B) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to

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equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. There is no beneficiary or
holder of a voting trust certificate or other interest of any trust of which
FBR Group is a trustee whose consent is required for the execution and delivery
of this Agreement or the compliance by FBR Group with the terms hereof, other
than such consents as have been obtained.

         (iii) No Conflicts. None of the execution and delivery of this
Agreement by FBR Group, the consummation by FBR Group of the transactions
contemplated hereby or compliance by FBR Group with any of the provisions
hereof shall (A) conflict with, or result in any breach of, any organizational
documents applicable to FBR Group, (B) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which FBR Group is a party or by which FBR Group or
any of the FBR Group Shares may be bound, or (C) violate any order, writ,
injunction, decree, judgment, order, statute, arbitration award, rule or
regulation applicable to FBR Group or any of the FBR Group Shares, in each
case, in a manner that could reasonably be expected to materially hinder or
impede FBR Group’s ability to perform their obligations hereunder.

     (b) The Company represents and warrants to FBR Group as follows:

         (i) Power; Binding Agreement. The Company has the corporate power
and authority to enter into and perform all of its obligations under this
Agreement. This Agreement has been duly and validly executed and delivered by
the Company and constitutes a valid and binding agreement of the Company,
enforceable in accordance with its terms, except that (A) such enforcement may
be subject to applicable bankruptcy, insolvency, moratorium, or other similar
laws, now or hereafter in effect, affecting creditors’ rights generally and (B)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought..

     Section 5. Termination. This Agreement and the covenants,
representations, warranties, and agreements contained herein shall terminate
upon the Expiration Date. Upon any termination of this Agreement, this
Agreement shall thereupon become void and of no further force and effect, and
there shall be no liability in respect of this Agreement on the part of any
party hereto or any of its directors, officers, partners, stockholders,
employees, agents, advisors, representatives or Affiliates; provided,
however, that nothing contained herein shall relieve any party from any
liability for such party’s willful breach of this Agreement prior to
termination.

     Section 6. Miscellaneous.

     (a) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by facsimile (with a
confirmatory copy sent by overnight courier), by overnight courier service
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses (or at such

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other address
for a party as shall be specified in a notice given in accordance with this
Section 6(a)):

               if to the Company:

               Specialty Underwriters’ Alliance, Inc.

               8585 Stemmons Freeway., Suite 600

               Suite 200, South Tower

               Dallas, Texas 75247

               Attention: Secretary

               Fax: 214-689-1871

               if to FBR Group:

               Friedman, Billings, Ramsey Group, Inc.

               1001 19th Street North

               Arlington, Virginia 22209

               Attention: General Counsel

               Fax: 703-469-1140

     (b) Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible.

     (c) Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof.

     (d) Assignment. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that, except as provided herein, no party may
assign, delegate or otherwise transfer any of its rights or obligations
hereunder, in whole or in part, by operation of law or otherwise by any of the
parties, without the consent of the other party hereto.

     (e) Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing herein, express
or implied, is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

     (f) Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with
the terms hereof and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or
equity.

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     (g) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of law) as to all matters, including, but not limited to, matters of validity,
construction, effect, performance and remedies.

     (h) Descriptive Headings; Interpretation. The descriptive headings
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.

     (i) Amendment, Modification and Waiver. This Agreement may not be
amended, modified or waived except by an instrument or instruments in writing
signed and delivered on behalf of the party hereto against whom such amendment,
modification or waiver is sought to be entered.

     (j) Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.

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     IN WITNESS WHEREOF, the Company and FBR Group have caused this Agreement
to be duly executed as of the day and year first above written.

	 	 	 	 	 
	 	SPECIALTY UNDERWRITERS’ ALLIANCE, INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Its: 	 
	 

	 	 	 	 	 
	 	FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Its: 	 
	 

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