Document:

EXHIBIT 10.2 Fortegra Subsidiary Guaranty Agreement

EXHIBIT 10.2
SUBSIDIARY GUARANTY AGREEMENT
THIS SUBSIDIARY GUARANTY AGREEMENT dated as of August 2, 2012 (this “Guaranty”), by each of the Subsidiaries signatory hereto and the other Persons from time to time party hereto pursuant to the execution and delivery of a Supplement to this Guaranty in the form of Annex 1 hereto (each of such Subsidiaries and each other such Person referred to herein as a “Guarantor” and collectively, the “Guarantors”) of Fortegra Financial Corporation, a Delaware corporation (“Fortegra”) and LOTS Intermediate Co., a Delaware corporation (together with Fortegra, each, a “Borrower” and collectively, the “Borrowers”), in favor of the Administrative Agent (as defined below) and each of the Guarantied Parties (as defined below).
Reference is made to that certain Credit Agreement, dated as of August 2, 2012 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, the lenders from time to time party thereto (the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrowers, and the Issuing Lender has agreed to issue Letters of Credit, pursuant to, and upon the terms and subject to the conditions specified in, the Credit Agreement, and the Hedging Counterparties and the Treasury Management Banks (such Treasury Management Banks, together with the Lenders, the Issuing Lender and the Hedging Counterparties, the “Guarantied Parties”) are owed Hedging Obligations and the Treasury Management Obligations, respectively, by certain Loan Parties.  Each of the Guarantors is a direct or indirect domestic Subsidiary of the Borrowers and acknowledges that it will derive substantial benefit from the making of the Loans by the Lenders and the issuance of Letters of Credit by the Issuing Lender.  The obligations of the Lenders to make Loans and the Issuing Lender to issue Letters of Credit are conditioned on, among other things, the execution and delivery by the Guarantors of this Guaranty.  As consideration therefor and in order to induce the Lenders to make Loans and the Issuing Lender to issue Letters of Credit, the Guarantors are willing to execute this Subsidiary Guaranty Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1.    Guarantee.  Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment of the Obligations or any obligation of a Guarantor hereunder (such payment and other obligations referred to herein as the “Guarantied Obligations”).  Each Guarantor further agrees that the Guarantied Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Guarantied Obligation.
SECTION 2.    Obligations Not Waived.  To the fullest extent permitted by applicable law, each Guarantor waives presentment to, demand of payment from and protest to the Borrowers of any of the Guarantied Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.  To the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be affected by (a) the failure of the 

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Administrative Agent or any Guarantied Party to assert any claim or demand or to enforce or exercise any right or remedy against the Borrowers or any other Guarantor under the provisions of the Credit Agreement, any other Loan Document or otherwise, (b) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Guaranty, the Credit Agreement any other Loan Document, any Guaranty or any other agreement, including with respect to any other Guarantor under this Guaranty, or (c) the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of the Administrative Agent or any Guarantied Party.
Each of the Guarantors authorizes the Administrative Agent and each of the other Guarantied Parties to (a) take and hold additional security for payment of the Guarantied Obligations and exchange, enforce, waive and release any security, (b) apply security and direct the order or manner of sale thereof as they in their sole discretion may determine and (c) release or substitute any one or more endorsees, other Guarantors or other obligors.
SECTION 3.    Guarantee of Payment.  Until such time as the Guarantied Obligations are terminated in accordance with Section 9 hereof, each Guarantor agrees that its guarantee is an absolute, unconditional and continuing guaranty of the payment and performance of the Guarantied Obligations and further agrees that its guarantee constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any Guarantied Party to any of the security held for payment of the Guarantied Obligations or to any balance of any deposit account or credit on the books of the Administrative Agent or any Guarantied Party in favor of the Borrowers or any other person.
SECTION 4.    No Discharge or Diminishment of Guarantee.  The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the payment in full in cash of the Guarantied Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guarantied Obligations, and shall not be subject to any defense or setoff, counterclaim (other than a defense of payment in full in cash or performance), recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Guarantied Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Administrative Agent or any Guarantied Party to assert any claim or demand or to enforce any remedy under the Credit Agreement or any other Loan Document, (ii) any extensions, compromise, refinancing, consolidation or renewals of any Guarantied Obligation, (iii) any change in the time, place or manner of payment of any of the Guarantied Obligations or any rescissions, waivers, compromise, refinancing, consolidation or other amendments or modifications of any of the terms or provisions of the Credit Agreement or the other Loan Documents or any other agreement evidencing, securing or otherwise executed in connection with any of the Guarantied Obligations, (iv) any default, failure or delay, willful or otherwise, in the performance of the Guarantied Obligations, (v) the addition, substitution or release of any entity or other Person primarily or secondarily liable for any Guarantied Obligation, (vi) the adequacy of any rights which the Administrative Agent or any Secured Creditor may have against any collateral security or other means of obtaining repayment of any of the Guarantied Obligations, (vii) the impairment of any collateral securing any of the Guarantied Obligations, including without limitation the failure to perfect or preserve any rights which the Administrative Agent or any 

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Secured Creditor might have in such collateral security or the substitution, exchange, surrender, release, loss or destruction of any such collateral security, or (viii) to the maximum extent permitted by applicable law, any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the payment in full in cash of all the Guarantied Obligations).  To the fullest extent permitted by law, each Guarantor hereby expressly waives any and all rights or defenses arising by reason of (A) any “one action” or “anti-deficiency” law, which would otherwise prevent the Administrative Agent or any Secured Creditor from bringing any action, including any claim for a deficiency, or exercising any other right or remedy (including any right of set-off), against such Guarantor before or after the Administrative Agent's or such Secured Creditor's commencement or completion of any foreclosure action, whether judicially, by exercise of power of sale or otherwise, or (B) any other law which in any other way would otherwise require any election of remedies by the Administrative Agent or any Secured Creditor.
SECTION 5.    Defenses of Borrowers Waived.  To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of either of the Borrowers or the unenforceability of the Guarantied Obligations or any part thereof from any cause, or the cessation from any cause of the liability of either of the Borrowers, other than the final payment in full in cash of the Guarantied Obligations.  The Administrative Agent and the Guarantied Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Guarantied Obligations, make any other accommodation with the Borrowers or any other guarantor, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guarantied Obligations have been fully and finally paid in cash.  Pursuant to applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrowers or any other Guarantor or guarantor, as the case may be, or any security.
SECTION 6.    Agreement to Pay; Subordination.  In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any Guarantied Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of either of the Borrowers or any other Loan Party to pay any Guarantied Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for the benefit of the Guarantied Parties in cash the amount of such unpaid Guarantied Obligations.  Upon payment by any Guarantor of any sums to the Administrative Agent, all rights of such Guarantor against the Borrowers arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior payment in full in cash of all the Guarantied Obligations.  In addition, any indebtedness of either of the Borrowers now or hereafter held by any Guarantor is hereby subordinated in right of payment to the prior payment in full in cash of the Guarantied Obligations.  If any amount shall erroneously be paid to any Guarantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such indebtedness of either of the Borrowers, such amount shall be held in trust for the benefit of the

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Administrative Agent and the Guarantied Parties and shall forthwith be paid to the Administrative Agent to be credited against the payment of the Guarantied Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents.
SECTION 7.    Information.  Each Guarantor assumes all responsibility for being and keeping itself informed of each of the Borrower's financial conditions and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guarantied Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the Guarantied Parties will have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks.
SECTION 8.    Representations and Warranties.  Each Guarantor represents and warrants as to itself that all representations and warranties relating to it (as a Subsidiary of the Borrowers) contained in the Credit Agreement are true and correct all as if such representations and warranties are set forth herein in full.
SECTION 9.    Termination. (a) The guarantees made hereunder (i) shall automatically terminate upon the satisfaction of the Termination Conditions, and (ii) shall continue to be effective or be reinstated, as the case may be, if and to the extent that (x) any payment, or any part thereof, of any Guarantied Obligation is rescinded or must otherwise be restored by any Guarantied Party or any Guarantor upon the bankruptcy or reorganization of either of the Borrowers, any Guarantor or otherwise and/or (y) any claim is made with respect to any Guarantied Obligations comprised of indemnification, expense reimbursement, tax gross-up or yield protection.
(b)    A Guarantor shall automatically be released from its obligations hereunder upon the consummation of any transaction permitted by the Credit Agreement as a result of which such Guarantor ceases to be a Subsidiary.
(c)    In connection with the foregoing clauses (a) and (b), the Administrative Agent shall execute and deliver to such Guarantor or Guarantor's designee, at such Guarantor's expense, any documents or instruments which such Guarantor shall reasonably request to evidence such termination or release.
SECTION 10.    Binding Effect; Several Agreement; Assignments.  Whenever in this Guaranty any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any of the parties hereto that are contained in this Guaranty shall bind and inure to the benefit of each party hereto and their respective successors and assigns.  This Guaranty shall become effective as to any Guarantor when a counterpart hereof executed on behalf of such Guarantor shall have been delivered to the Administrative Agent, and a counterpart hereof shall have been executed on behalf of the Administrative Agent, and thereafter shall be binding upon such Guarantor and the Administrative Agent and their respective successors and assigns, and shall inure to the benefit of such Guarantor, the Administrative Agent and the Guarantied Parties, and their respective successors and assigns, except that no Guarantor shall have the right to assign its rights or obligations hereunder or any interest herein (and any such attempted assignment shall be void).

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SECTION 11.    Waivers; Amendment.  (a) No failure or delay of the Administrative Agent in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and powers of the Administrative Agent hereunder and of the Guarantied Parties under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Guaranty or consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver and consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice in similar or other circumstances.
(b)    Neither this Guaranty nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Guarantors (subject to the immediately following sentence) with respect to which such waiver, amendment or modification relates and the Administrative Agent, with the prior written consent of the Required Lenders (except as otherwise provided in the Credit Agreement).  This Guaranty shall be construed as a separate agreement with respect to each Guarantor and may be amended, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder.
SECTION 12.    Governing Law.  THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 13.    Notices.  All communications and notices hereunder shall be in writing and given as provided in Section 11.1 of the Credit Agreement.  All communications and notices hereunder to each Guarantor shall be given to it at the address specified for the Borrowers as set forth in Section 11.1 of the Credit Agreement.
SECTION 14.    Survival of Agreement; Severability.  (a) All covenants, agreements representations and warranties made by or on behalf of the Guarantors herein, in the Credit Agreement, in the other Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Guaranty, the Credit Agreement or the other Loan Documents shall be considered to have been relied upon by the Administrative Agent and the Guarantied Parties and shall survive the making by the Lenders of the Loans and the issuance by the Issuing Lender of the Letters of Credit regardless of any investigation made by any of them or on their behalf, and shall continue in full force and effect as long as Termination Conditions have not been satisfied.
(b)    In the event one or more of the provisions contained in this Guaranty or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).  The parties shall endeavor in good-faith negotiations to

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replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 15.    Counterparts.  This Guaranty may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract (subject to Section 10), and shall become effective as provided in Section 10.  Delivery of an executed signature page to this Guaranty by facsimile transmission or by email, in pdf format, shall be as effective as delivery of a manually executed counterpart of this Guaranty.
SECTION 16.    Rules of Interpretation.  The rules of interpretation specified in Section 1.3 of the Credit Agreement shall be applicable to this Guaranty.
SECTION 17.    Jurisdiction; Consent to Service of Process.  (a) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the United States District Court of the Southern District of New York and of any state court of the State of New York located in New York County and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Guaranty or the other Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York state court or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
Each Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guaranty or the other Loan Documents in any New York State or Federal court.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
Each party to this Guaranty irrevocably consents to service of process in the manner provided for notices in Section 13.  Nothing in this Guaranty will affect the right of any party to this Guaranty to serve process in any other manner permitted by law.
SECTION 18.    Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY, THE CREDIT AGREEMENT OR THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY, THE CREDIT AGREEMENT AND THE

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OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.
SECTION 19.    Additional Guarantors.  Upon execution and delivery after the date hereof by the Administrative Agent and a Subsidiary of the Borrowers of an instrument in the form of Annex 1, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein.  The execution and delivery of any instrument adding an additional Guarantor as a party to this Guaranty shall not require the consent of any other Guarantor hereunder.  The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Guaranty.
SECTION 20.    Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Guarantied Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Guarantied Party to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor now or hereafter existing under this Guaranty and the other Loan Documents held by such Guarantied Party, irrespective of whether or not such Person shall have made any demand under this Guaranty or any other Loan Document and although such obligations may be unmatured.  Each Guarantied Party agrees to promptly notify the Administrative Agent and the Borrowers after any such set-off and any application made by such Guarantied Party; provided that the failure to give notice shall not affect the validity of such set-off and application.  The rights of each Guarantied Party under this Section 20 are in addition to other rights and remedies (including other rights of setoff) which such Guarantied Party may have.
SECTION 21.    It is the intent of each Guarantor, the Administrative Agent and the Guarantied Parties that in any proceeding, such Guarantor's maximum obligation hereunder shall equal, but not exceed, the maximum amount which would not otherwise cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Administrative Agent and the Guarantied Parties) to be avoidable or unenforceable against such Guarantor in such Proceeding as a result of any Requirement of Laws, including without limitation, (a) Section 548 of the Bankruptcy Code and (b) any state fraudulent transfer or fraudulent conveyance act or statute applied in such proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise.  The Requirements of Law under which the possible avoidance or unenforceability of the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Administrative Agent and the Guarantied Parties) shall be determined in any such Proceeding are referred to as the “Avoidance Provisions”.  Accordingly, to the extent that the obligations of any Guarantor hereunder would otherwise be subject to avoidance under the Avoidance Provisions, the maximum Guarantied Obligations for which such Guarantor shall be liable hereunder shall be reduced to that amount which, as of the time any of the Guarantied Obligations are deemed to have been incurred under the Avoidance Provisions, would not cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Administrative Agent and the Guarantied Parties), to be subject to avoidance under the Avoidance Provisions.  This Section is intended solely to preserve the rights of the Administrative Agent and the Guarantied Parties hereunder to the maximum extent that would

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 not cause the obligations of any Guarantor hereunder to be subject to avoidance under the Avoidance Provisions, and no Guarantor or any other Person shall have any right or claim under this Section as against the Administrative Agent and the Guarantied Parties that would not otherwise be available to such Person under the Avoidance Provisions.
[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Subsidiary Guaranty Agreement as of the day and year first above written.
GUARANTORS
LOTSOLUTIONS, INC.
By:      /s/ Richard S. Kahlbaugh
Name:   Richard S. Kahlbaugh 
Title: Chairman

BLISS AND GLENNON, INC.
By:      /s/ Richard S. Kahlbaugh
Name:   Richard S. Kahlbaugh 
Title: Chairman

AUTO KNIGHT MOTOR CLUB INC.
By /s/ John G. Short
Name: John G. Short
Title: Chairman and Chief Executive Officer
CONTINENTAL CAR CLUB, INC.
By /s/ John G. Short
Name: John G. Short
Title: Chairman, Chief Executive Officer and President
UNITED MOTOR CLUB OF AMERICA, INC.
By /s/ John G. Short
Name: John G. Short
Title: Chairman and Chief Executive Officer

[Signature Page to Subsidiary Guaranty]

EREINSURE.COM, INC.
By:      /s/ Richard S. Kahlbaugh
Name:   Richard S. Kahlbaugh 
Title: Chairman
SOUTH BAY ACCEPTANCE CORPORATION
By /s/ Walter P. Mascherin
Name: Walter P. Mascherin
Title: Chairman, Chief Executive Officer and President

PACIFIC BENEFITS GROUP NORTHWEST, L.L.C.
By:      /s/ Richard S. Kahlbaugh
Name:   Richard S. Kahlbaugh 
Title: Chief Executive Officer

[Signature Page to Subsidiary Guaranty]

ADMINISTRATIVE AGENT
WELLS FARGO BANK, NATIONAL ASSOCIATION
By  /s/ Charles N. Kauffman
Name:Charles N. Kauffman
Title: Senior Vice President

[Signature Page to Subsidiary Guaranty]

ANNEX 1 TO THE
SUBSIDIARY GUARANTY AGREEMENT
SUPPLEMENT NO. [    ] dated as of [              ] (this “Supplement”), to the Subsidiary Guaranty Agreement (the “Guaranty Agreement”), dated as of August 2, 2012, executed by each of the Subsidiaries party thereto (each such Subsidiary individually, a “Guarantor” and collectively, the “Guarantors”) of Fortegra Financial Corporation, a Delaware corporation (“Fortegra”), and LOTS Intermediate Co., a Delaware corporation (together with Fortegra, each, a “Borrower” and collectively, the “Borrowers”).
A.    Reference is made to that certain Credit Agreement, dated as of August 2, 2012 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, the lenders from time to time party thereto (the “Lenders”) and Wells Fargo Bank, National Association, as Administrative Agent.
B.    Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guaranty Agreement and the Credit Agreement.
C.    The Guarantors have entered into the Guaranty Agreement in order to induce the Lenders to make Loans and other financial accommodations to the Borrowers.  Pursuant to Section 6.10 of the Credit Agreement, certain Subsidiaries are required to enter into or otherwise become a party to the Guaranty Agreement as a Guarantor.  Section 19 of the Guaranty Agreement provides that such Subsidiaries of the Borrowers may become Guarantors under the Guaranty Agreement by execution and delivery of an instrument in the form of this Supplement.  The undersigned Subsidiary of the Borrowers (“New Guarantor”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guaranty Agreement in order to induce the Lenders to make additional extensions of credit and as consideration for extensions of credit previously made.
Accordingly, the Administrative Agent and the New Guarantor agree as follows:
SECTION 1.    In accordance with Section 19 of the Guaranty Agreement, the New Guarantor by its signature below becomes a Guarantor under the Guaranty Agreement with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms and provisions of the Guaranty Agreement applicable to it as Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct all as if such representations and warranties were set forth herein in full on and as of the date hereof.  Each reference to a Guarantor in the Guaranty Agreement shall be deemed to include the New Guarantor.  The Guaranty Agreement is hereby incorporated herein by reference.
SECTION 2.    The New Guarantor represents and warrants to the Administrative Agent and the Lenders that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, receivership, moratorium, or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

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SECTION 3.    This Supplement may be executed in counterparts each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Supplement shall become effective when the Administrative Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Guarantor and the Administrative Agent.  Delivery of an executed signature page to this Supplement by facsimile transmission or by email, in pdf format, shall be as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4.    Except as expressly supplemented hereby, the Guaranty Agreement shall remain in full force and effect.
SECTION 5.    THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.    In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guaranty Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision hereof in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).  The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 13 of the Guaranty Agreement.  All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below.
SECTION 8.    To the extent the following expenses are not paid by the Borrowers under the Credit Agreement, the New Guarantor agrees to reimburse the Administrative Agent for its fees and expenses in connection with this Supplement to the extent the Borrowers would be required to do so under Section 11.3 of the Credit Agreement, including the fees, disbursements and other charges of counsel for the Administrative Agent.
[Signature Page Follows]

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IN WITNESS WHEREOF, the New Guarantor has duly executed this Supplement to the Subsidiary Guaranty Agreement as of the day and year first above written.
[Name of New Guarantor]
By:  ________________________________
Name:
Title:
Address:
____________________________________
____________________________________
____________________________________
Attention: ___________________________
Telecopy Number:  ___________________
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative
Agent
By:  ________________________________
Name:
Title

13EXHIBIT 10.3 Fortegra-PledgeAgreement

PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated as of August 2, 2012 (together with all amendments, if any, from time to time hereto, this “Agreement”) by and among FORTEGRA FINANCIAL CORPORATION, a Delaware corporation (“Fortegra”), LOTSolutions, Inc., a Georgia corporation (“LOTSolutions”), and the other Persons who may become “Pledgors” hereunder (together with Fortegra and LOTSolutions, each, a “Pledgor” and collectively, the “Pledgors”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”) for its benefit and the benefit of the other Lenders (as defined in the Credit Agreement defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of the date hereof by and among Fortegra, LOTS Intermediate Co., a Delaware corporation (“LOTS”; together with Fortegra, the “Borrowers”), the lenders from time to time party thereto (the “Lenders”) and the Administrative Agent (as from time to time amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), the Lenders have agreed to make Loans and the Issuing Lender has agreed to issue Letters of Credit to the Borrowers;
WHEREAS, certain Pledgors are the record and beneficial owners of the stock listed in Part A of Schedule I hereto and certain Pledgors are the owners of the promissory notes and instruments listed in Part B of Schedule I hereto;
WHEREAS, in order to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and the other Loan Documents, to induce the Lenders to make the Loans as provided for in the Credit Agreement, and to induce the Secured Parties (as defined below) to make other extensions of credit available to the Borrowers, each Pledgor has agreed to pledge the Pledged Collateral to the Administrative Agent to secure the payment and performance of the Obligations in accordance herewith;
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Pledgors hereby agree as follows:
1.Definitions.  Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined, and the following shall have (unless otherwise provided elsewhere in this Agreement) the following respective meanings (such meanings being equally applicable to both the singular and plural form of the terms defined):
“Act” has the meaning assigned to such term in Section 8(c) hereof.
“Administrative Agent” has the meaning assigned to such term in the introductory paragraph hereof.
“Agreement” has the meaning assigned to such term in the introductory paragraph hereof.

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“Bankruptcy Code” means title 11, United States Code, as amended from time to time, and any successor statute thereto.
“Borrowers” has the meaning assigned to such term in the recitals hereto.
“Credit Agreement” has the meaning assigned to such term in the recitals hereto.
“Fortegra” has the meaning assigned to such term in the introductory paragraph hereof.
“Lenders” has the meaning assigned to such term in the recitals hereto.
“LOTS” has the meaning assigned to such term in the recitals hereto.
“LOTSolutions” has the meaning assigned to such term in the recitals hereto.
“Pledge Amendment” has the meaning assigned to such term in Section 6(d) hereof.
“Pledged Collateral” has the meaning assigned to such term in Section 2 hereof.
“Pledged Entity” means an issuer of Pledged Shares.
“Pledged Indebtedness” means the Indebtedness evidenced by promissory notes and instruments listed on Part B of Schedule I hereto.
“Pledged Shares” means the stock listed on Part A of Schedule I hereto.
“Pledgor” has the meaning assigned to such term in the introductory paragraph hereof.
“Secured Obligations” has the meaning assigned to such term in Section 3 hereof.
“Secured Parties” means the Lenders, the Issuing Lender, the Hedging Counterparties and the Treasury Management Banks.
“Termination Date” has the meaning assigned to such term in Section 11 hereof.
2.Pledge.  The Pledgors hereby pledge and charge to the Administrative Agent, and grant to the Administrative Agent for itself and the benefit of the Secured Parties, a first priority security interest in all of the following (collectively, the “Pledged Collateral”):
(a)the Pledged Shares and the certificates representing the Pledged Shares, and all dividends, distributions and other products or proceeds of the foregoing from time to time received or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; and
(b)any additional shares of stock from time to time acquired by the Pledgors in any manner (which shares shall be deemed to be part of the Pledged Shares), and the certificates representing such additional shares, and all dividends, distributions and other products or proceeds from time to time received or otherwise distributed in respect of or in exchange for any or all of such stock; and

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(c)the Pledged Indebtedness, and the promissory notes or instruments evidencing the Pledged Indebtedness, and all interest, products or proceeds of the foregoing from time to time received or otherwise distributed in respect of the Pledged Indebtedness; and
(d)all additional Indebtedness arising after the date hereof and owing to the Pledgors evidenced by promissory notes or other instruments (other than items deposited for collection in the ordinary course of business), together with such promissory notes and instruments, and all interest, products or proceeds of the foregoing from time to time received, receivable or otherwise distributed in respect of that Pledged Indebtedness; provided that, notwithstanding the foregoing, the term “Pledged Collateral” (and any component definition thereof) shall not include (i) ownership interests in joint ventures and non-wholly-owned Subsidiaries to the extent that such ownership interests cannot be pledged without the consent of one or more non-Affiliate third parties, (ii) any promissory note or instrument to which any Pledgor is a party or any of such Pledgor’s rights or interests thereunder if and only for so long as the grant of a Lien thereon shall (A) give the payor under, or the maker of such promissory note or instrument, the right to terminate its obligations thereunder, (B) constitute or result in the abandonment, invalidation or unenforceability of any right, title or interest of any Pledgor therein or (C) constitute or result in a breach or termination pursuant to the terms of, or a default under, any such promissory note or instrument (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions)); provided that such promissory note or instrument shall be excluded from the definition of “Pledged Collateral” only to the extent and for so long as the consequences specified above shall exist and shall cease to be excluded from the definition of “Pledged Collateral” and shall become subject to the Liens granted hereunder, immediately and automatically, at such time as such consequences shall no longer exist, (iii) any asset if the grant or perfection of a security interest is prohibited by applicable law for so long as such law is in force and applicable hereto, (iv) any Capital Stock of any Subsidiary held by any Pledgor, other than the Capital Stock of LOTS held by Fortegra, but only for so long as Indebtedness under the Trust Preferred Indenture is outstanding, (v) the Capital Stock of South Bay Acceptance Corporation, if the grant or perfection of a security interest therein requires the consent, approval or authorization of any Governmental Authority, which consent, approval or authorization has not been received or obtained and (vi) any property acquired by any Loan Party if and to the extent that the Administrative Agent and the Borrowers shall have determined that the costs (including, without limitation, recording taxes and filing fees) of creating and perfecting a Lien on such property interests are excessive in relation to the value of the security afforded thereby.
3.Security for Obligations.  This Agreement secures, and the Pledged Collateral is security for, the prompt payment in full when due, whether at stated maturity, by acceleration or otherwise, and performance of all Obligations, and all obligations of the Pledgors now or hereafter existing under this agreement (collectively, the “Secured Obligations”).
4.Delivery of Pledged Collateral.  All certificates evidencing the Pledged Stock and all promissory notes and instruments evidencing the Pledged Indebtedness with a face value in
 excess of $1,000,000 individually shall be delivered to, and each Pledgor agrees to promptly so deliver to or cause to be delivered to, and held by or on behalf of the Administrative Agent, for itself and the benefit of the Secured Parties, pursuant hereto.  All Pledged Shares which are certificated and delivered 

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in accordance with the immediately preceding sentence shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Administrative Agent and all promissory notes or other instruments evidencing the Pledged Indebtedness shall be endorsed by the Pledgors or accompanied by a duly executed instrument of transfer or allonge and such other instruments as the Administrative Agent may reasonably request, in form and substance reasonably satisfactory to the Administrative Agent.
5.Representations and Warranties of Pledgors.  Each Pledgor represents and warrants to the Administrative Agent that:
(a)    such Pledgor is, and at the time of delivery of the Pledged Shares to the Administrative Agent will be, the sole holder of record and the sole beneficial owner of such Pledged Shares pledged by such Pledgor free and clear of any Lien thereon or affecting the title thereto, except for any Lien created by this Agreement and any Permitted Liens; such Pledgor is, and at the time of delivery of the Pledged Indebtedness to the Administrative Agent will be, the sole owner of such Pledged Indebtedness free and clear of any Lien thereon or affecting title thereto, except for any Lien created by this Agreement and any Permitted Liens;
(b)    all of the Pledged Shares issued by any Subsidiary of any Pledgor have been duly authorized, validly issued and are fully paid and non-assessable; the Pledged Indebtedness issued by any Subsidiary of any Pledgor has been duly authorized, authenticated or issued and delivered by, and is, to the knowledge of such Pledgor, the legal, valid and binding obligations of, the Person obligated under such Pledged Indebtedness; and no such Person that is a Loan Party is in default in any material respect thereunder or of any material provision thereunder;
(c)    such Pledgor has the right and requisite authority to pledge, assign, transfer, deliver, deposit and set over the Pledged Collateral pledged by such Pledgor to the Administrative Agent as provided herein;
(d)    none of the Pledged Shares or Pledged Indebtedness, in each case issued by any Subsidiary of any Pledgor, has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject; provided that no representation is made with respect to any transfer to the Administrative Agent pursuant to the terms of this Agreement;
(e)    all of the Pledged Shares are, as of the date hereof, presently owned by such Pledgor, and, to the extent applicable, are presently represented by the certificates listed on Part A of Schedule I hereto or on the Pledge Amendment (as defined below), as the case may be.  As of the date hereof, there are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged Shares;

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(f)    no consent, approval, authorization or other order or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required (i) for the pledge by such Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by such Pledgor, or (ii) for the exercise by the Administrative Agent of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement, except, in each case, for compliance with the Act, those as have been obtained or made and are in full force and effect and recordings and filings in connection with the perfection of the Liens granted to the Administrative Agent hereunder;
(g)    each Subsidiary that is issuing Pledged Shares but that is not a corporation will not issue certificates to evidence its equity interests unless it has opted in to Article 8 under Section 8-103(c) of the UCC;
(h)    the Uniform Commercial Code financing statements containing a description of the Pledged Collateral, which have been prepared by the Administrative Agent based upon the information provided to the Administrative Agent and the Secured Parties by the Pledgors for filing in each governmental office specified on Schedule II hereof, are all the filings that are necessary as of the Closing Date to establish a legal, valid and perfected security interest in favor of the Administrative Agent (for the ratable benefit of the Secured Parties) in respect of all Pledged Collateral in which the security interest may be perfected by filing a financing statement under the Uniform Commercial Code;
(i)    the security interests granted in the Pledged Collateral pursuant to this Agreement (i) will create a legal and valid Lien and security interest in the Pledged Collateral in favor of the Administrative Agent for the benefit of the Administrative Agent and the Secured Parties, securing the payment of the Secured Obligations and (ii), subject to the filings described in Section 5(h) constitutes a perfected security interest in all Pledged Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any state thereof) pursuant to the Uniform Commercial Code, and such Lien is prior to all other Liens other than Permitted Liens;
(j)    this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms except as may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, receivership, moratorium or other laws affecting creditors’ rights generally and the effects of general principles of equity;
(k)    the Pledged Shares issued by LOTS constitute 100% of the issued and outstanding shares of stock of LOTS; and
(l)    except as disclosed on Part B of Schedule I, as of the Closing Date, none of the Pledged Indebtedness is subordinated in right of payment to other Indebtedness (except for the Secured Obligations) or subject to the terms of an indenture.

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The representations and warranties set forth in this Section 5 shall survive the execution and delivery of this Agreement.
6.Covenants.  Each Pledgor covenants and agrees that until the Termination Date:
(a)    such Pledgor will, at its expense, promptly execute, acknowledge and deliver all such instruments and take all such actions as the Administrative Agent from time to time may reasonably request in order to ensure to the Administrative Agent and the Secured Parties the benefits of the Liens in and to the Pledged Collateral intended to be created by this Agreement, including the filing of any necessary Uniform Commercial Code financing statements, which may be filed by the Administrative Agent, and will cooperate with the Administrative Agent, at each Pledgor’s expense, in obtaining all necessary approvals and making all necessary filings under federal, state or local law in connection with such Liens or any sale or transfer of the Pledged Collateral conducted pursuant to the terms of this Agreement;
(b)    each Pledgor has and will defend the title to the Pledged Collateral and the Liens of the Administrative Agent in the Pledged Collateral against the claim of any Person (other than holders of Permitted Liens) and will maintain and preserve such Liens;
(c)    except for the security interests granted hereunder (or otherwise permitted under the Credit Agreement), each Pledgor (i) is and, subject to any transfers made in compliance with the Credit Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Shares indicated on Part A of Schedule I as owned by such Pledgor, (ii) holds the same free and clear of all Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than transfers made in compliance with the Credit Agreement, and (iv) subject to Section 7, will cause any and all Pledged Collateral, whether for value paid by such Pledgor or otherwise, to be forthwith deposited with the Collateral Agent and pledged or assigned hereunder;
(d)    each Pledgor will, upon obtaining ownership of any additional stock or promissory notes or instruments, in each case, of the type constituting Pledged Collateral, promptly (and in any event within ten Business Days or such longer period as to which the Administrative Agent may consent) deliver to the Administrative Agent a Pledge Amendment, duly executed by each Pledgor, in substantially the form of Exhibit A hereto (a “Pledge Amendment”) in respect of any such additional stock, notes or instruments, pursuant to which each Pledgor shall pledge to the Administrative Agent for its benefit and the benefit of the Secured Parties all of such additional stock, notes and instruments subject to the limitations on the pledge of the voting stock of Foreign Subsidiaries contained in this Agreement and the other Loan Documents.  Each Pledgor hereby authorizes the Administrative Agent to attach each Pledge Amendment to this Agreement and agrees that all Pledged Shares and Pledged Indebtedness listed on any Pledge Amendment delivered to the Administrative Agent shall for all purposes hereunder be considered Pledged Collateral.

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7.Pledgors’ Rights.  As long as no Event of Default shall have occurred and be continuing and until written notice shall be given to the Pledgors in accordance with Section 8(a) hereof:
(a)    each Pledgor shall have the right, from time to time, to vote and give consents with respect to the Pledged Collateral owned by it, or any part thereof for all purposes not inconsistent with the provisions of this Agreement, the Credit Agreement or any other Loan Document; provided, however, that no vote shall be cast, and no consent shall be given or action taken, which is not conditioned upon the satisfaction of the Termination Conditions or receipt of the consent or approval of the Required Lenders or all affected Lenders, as applicable, under the Credit Agreement if such vote would have the effect of impairing the position or interest of the Administrative Agent in respect of the Pledged Collateral (unless and to the extent expressly permitted by the Credit Agreement) or which would authorize, effect or consent to (unless and to the extent expressly permitted by the Credit Agreement):
(i)the dissolution or liquidation, in whole or in part, of a Pledged Entity;
(ii)the consolidation or merger of a Pledged Entity with any other Person; or
(iii)the sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the Administrative Agent; and
(b)    each Pledgor shall be entitled, from time to time, to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Shares and Pledged Indebtedness to the extent (A) the transaction or event which enabled such payment was not in violation of the Credit Agreement and (B) the payment thereof is not in violation of the Credit Agreement, other than any and all dividends and interest paid or payable other than in cash in respect of any Pledged Collateral, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; provided, however, that until actually paid all rights to such distributions shall remain subject to the Lien created by this Agreement.
8.Defaults and Remedies; Proxy.
(a)    Upon the occurrence of an Event of Default and during the continuation of such Event of Default, and concurrently with written notice to the applicable Pledgor, the Administrative Agent (personally or through an agent) is hereby authorized and empowered (i) to transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, (ii) to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, (iii) to exercise (upon one Business Day’s prior written notice to the applicable Pledgor) the voting (if any) and all other rights as a holder with respect thereto, (iv) to collect and receive all cash dividends, interest, principal and other distributions made thereon, (v) to receive, upon the request of the Administrative Agent, all other distributions in respect of any of the Pledged Shares or Pledged Indebtedness,

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 whenever paid or made, to hold as Pledged Collateral (provided that, if such dividends, interest or distributions are received by any Pledgor, they shall be received in trust for the benefit of the Administrative Agent, be segregated from the other property or funds of such Pledgor, and be forthwith delivered to the Administrative Agent as Pledged Collateral in the same form as so received (with any necessary endorsement)), (vi) subject to the mandatory requirements of applicable law, to sell in one or more sales after ten days notice of the time and place of any public sale or of the time at which a private sale is to take place (which notice each Pledgor agrees is commercially reasonable) the whole or any part of the Pledged Collateral and (vii) to otherwise act with respect to the Pledged Collateral as though the Administrative Agent was the outright owner thereof.  Any sale shall be made at a public or private sale at the Administrative Agent’s place of business, or at any place to be named in the notice of sale, either for cash or upon credit or for future delivery at such price as the Administrative Agent may deem fair, and the Administrative Agent may be the purchaser of the whole or any part of the Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of any Pledgor or any right of redemption.  Each sale shall be made to the highest bidder, but the Administrative Agent reserves the right to reject any and all bids at such sale which, in its discretion, it shall deem inadequate.  Demands of performance, except as otherwise herein specifically provided for, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by an auctioneer or any officer or agent of the Administrative Agent.  EACH PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AND DURING THE CONTINUATION OF SUCH EVENT OF DEFAULT, AS THE PROXY AND ATTORNEY-IN-FACT OF SUCH PLEDGOR WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED SHARES UPON THE GIVING OF NOTICE AS REQUIRED BY SECTION 8(A)(III) ABOVE, WITH FULL POWER OF SUBSTITUTION TO DO SO.  THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION DATE.  IN ADDITION TO THE RIGHT TO VOTE THE PLEDGED SHARES UPON THE GIVING OF NOTICE AS REQUIRED BY SECTION 8(A)(III) ABOVE, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AND DURING THE CONTINUATION OF SUCH EVENT OF DEFAULT, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD BE ENTITLED (INCLUDING UPON THE GIVING OF NOTICE AS REQUIRED BY SECTION 8(A)(III) ABOVE, GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS).  SUCH PROXY SHALL BE EFFECTIVE AUTOMATICALLY UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AND DURING THE CONTINUATION OF SUCH EVENT OF DEFAULT AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY

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 ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT.  NOTWITHSTANDING THE FOREGOING, THE ADMINISTRATIVE AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.
(b)    If, at the original time or times appointed for the sale of the whole or any part of the Pledged Collateral, the highest bid, if there be but one sale, shall be inadequate to discharge in full all the Secured Obligations, or if the Pledged Collateral be offered for sale in lots, if at any of such sales, the highest bid for the lot offered for sale would indicate to the Administrative Agent, in its discretion, that the proceeds of the sales of the whole of the Pledged Collateral would be unlikely to be sufficient to discharge all the Secured Obligations, the Administrative Agent may, on one or more occasions and in its discretion, postpone any of said sales by public announcement at the time of sale or the time of previous postponement of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived; provided, however, that any sale or sales made after such postponement shall be after ten days’ notice to the Pledgors.
(c)    If, at any time when the Administrative Agent shall determine to exercise its right to sell the whole or any part of the Pledged Collateral hereunder, such Pledged Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act of 1933, as amended (or any similar statute then in effect) (the “Act”), or even if it is so registered, the Administrative Agent may, in its discretion (subject only to applicable Requirements of Law), sell such Pledged Collateral or part thereof by private sale in such manner and under such circumstances as the Administrative Agent may deem necessary or advisable, but subject to the other requirements of this Section 8, and shall not be required to effect such registration or to cause the same to be effected.  Without limiting the generality of the foregoing, in any such event, the Administrative Agent in its discretion (x) may, in accordance with applicable securities laws, proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Collateral or part thereof could be or shall have been filed under said Act (or similar statute), (y) may approach and negotiate with a single possible purchaser to effect such sale, and (z) may restrict such sale to a purchaser who is an accredited investor under the Act and who will represent and agree that such purchaser is purchasing for its own account, for investment and not with a view to the distribution or sale of such Pledged Collateral or any part thereof.  In addition to a private sale as provided above in this Section 8, if any of the Pledged Collateral shall not be freely distributable to the public without registration under the Act (or similar statute) at the time of any proposed sale pursuant to this Section 8, then the Administrative Agent shall not be required to effect such registration or cause the same to be effected but, in its discretion (subject only to applicable Requirements of Law), may require that any sale hereunder (including a sale at auction) be conducted subject to restrictions:

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(i)    as to the financial sophistication and ability of any Person permitted to bid or purchase at any such sale;
(ii)    as to the content of legends to be placed upon any certificates representing the Pledged Collateral sold in such sale, including restrictions on future transfer thereof;
(iii)    as to the representations required to be made by each Person bidding or purchasing at such sale relating to that Person’s access to financial information about any Pledgor and such Person’s intentions as to the holding of the Pledged Collateral so sold for investment for its own account and not with a view to the distribution thereof; and
(iv)    as to such other matters as the Administrative Agent may, in its discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the Bankruptcy Code and other laws affecting the enforcement of creditors’ rights and the Act and all applicable state securities laws.
(d)    The Pledgors recognize that the Administrative Agent may not effect a public sale of any or all the Pledged Collateral and may resort to one or more private sales thereof in accordance with clause (c) above.  Each Pledgor also acknowledges that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private.  The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit the Pledged Entity to register such securities for public sale under the Act, or under applicable state securities laws, even if such Pledgor and the Pledged Entity would agree to do so.
(e)    Each Pledgor agrees to the maximum extent permitted by applicable law that following the occurrence and during the continuance of an Event of Default it will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or the absolute sale of the whole or any part of the Pledged Collateral or the possession thereof by any purchaser at any sale hereunder, and such Pledgor waives the benefit of all such laws to the extent it lawfully may do so.  Each Pledgor agrees that it will not interfere with any right, power and remedy of the Administrative Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.  No failure or delay on the part of the Administrative Agent to exercise any such right, power or remedy and no notice or demand which may be given to or made upon such Pledgor by the Administrative Agent with respect to any such remedies shall operate as a waiver thereof, or limit or impair the Administrative Agent’s right to take any action or to exercise

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 any power or remedy hereunder, without notice or demand, or prejudice its rights as against such Pledgor in any respect.
(f)    Each Pledgor further agrees that a breach of any of the covenants contained in this Section 8 will cause irreparable injury to the Administrative Agent, that the Administrative Agent shall have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 8 shall be specifically enforceable against such Pledgor, and each Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that the Secured Obligations are not then due and payable in accordance with the agreements and instruments governing and evidencing such obligations.
9.Waiver.  No delay on the Administrative Agent’s part in exercising any power of sale, Lien, option or other right hereunder, and no notice or demand which may be given to or made upon Pledgors by the Administrative Agent with respect to any power of sale, Lien, option or other right hereunder, shall constitute a waiver thereof, or limit or impair the Administrative Agent’s right to take any action or to exercise any power of sale, Lien, option, or any other right hereunder, without notice or demand, or prejudice the Administrative Agent’s rights as against the Pledgors in any respect.
10.Assignment.  The Administrative Agent may assign, indorse or transfer any instrument evidencing all or any part of the Secured Obligations as provided in, and in accordance with, the Credit Agreement, and the holder of such instrument shall be entitled to the benefits of this Agreement.
11.Termination.  Immediately following the satisfaction of the Termination Conditions (the “Termination Date”), (a) the Administrative Agent shall promptly deliver to the Pledgors all Pledged Collateral pledged by each Pledgor at the time subject to this Agreement and all instruments of assignment executed in connection therewith; (b) subject to Section 14 of this Agreement, all documents and instruments executed and delivered pursuant to clause (a) above shall be free and clear of the Liens hereof and, except as otherwise expressly provided herein, all of Pledgors’ obligations hereunder shall at such time terminate; and (c) in connection with any termination or release pursuant to clause (a) above, the Administrative Agent shall promptly execute and deliver to the Pledgors all Uniform Commercial Code termination statements and similar documents that the Pledgors shall reasonably require to evidence such termination or release.
12.Lien Absolute.  All rights of the Administrative Agent hereunder, and all obligations of the Pledgors hereunder, shall be absolute and unconditional irrespective of:
(a)    any lack of validity or enforceability of the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Secured Obligations;
(b)    any change in the time, manner or place of payment of, or in any other term of, all or any part of the Secured Obligations, or any other amendment or waiver of

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 or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Secured Obligations;
(c)    any exchange, release or non-perfection of any other Collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations;
(d)    the insolvency of any Loan Party; or
(e)    any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Pledgor (other than the occurrence of the Termination Date).
13.Release.  Each Pledgor consents and agrees that the Administrative Agent may at any time, or from time to time, in its discretion:
(a)    renew, extend or change the time of payment, and/or the manner, place or terms of payment of all or any part of the Secured Obligations, subject to the terms of the Credit Agreement; and
(b)    exchange, release and/or surrender all or any of the Collateral (including the Pledged Collateral), or any part thereof, by whomsoever deposited, which is now or may hereafter be held by the Administrative Agent in connection with all or any of the Secured Obligations; all in such manner and upon such terms as the Administrative Agent may deem proper, and without notice to or further assent from Pledgors, it being hereby agreed that each Pledgor shall be and remain bound upon this Agreement, irrespective of the value or condition of any of the Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension, and notwithstanding also that the Secured Obligations may, at any time, exceed the aggregate principal amount thereof set forth in the Credit Agreement, or any other agreement governing any Secured Obligations.  Each Pledgor hereby waives notice of acceptance of this Agreement, and also presentment, demand, protest and notice of dishonor of any and all of the Secured Obligations, and promptness in commencing suit against any party hereto or liable hereon, and in giving any notice to or of making any claim or demand hereunder upon such Pledgor.  No act or omission of any kind on the Administrative Agent’s part shall in any event affect or impair this Agreement.
14.Reinstatement.  This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Pledgor or any Pledged Entity for liquidation or reorganization, should any Pledgor or any Pledged Entity become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of a Pledgor’s or a Pledged Entity’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or performance had not been made.  In the event that any payment, or any part thereof,
 

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is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
15.Miscellaneous.
(a)    The Administrative Agent may execute any of its duties hereunder by or through agents or employees and shall be entitled to advice of counsel concerning all matters pertaining to its duties hereunder.
(b)    Each Pledgor agrees to reimburse the Administrative Agent for fees and expenses incurred by the Administrative Agent in connection with the administration and enforcement of this Agreement to the extent the Borrowers would be required to do so under Section 11.3 of the Credit Agreement.
(c)    Neither the Administrative Agent, nor any of its respective officers, directors, employees, agents or counsel shall be liable for any action lawfully taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
(d)    THIS AGREEMENT SHALL BE BINDING UPON EACH PLEDGOR AND ITS SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN‐ POSSESSION ON BEHALF OF SUCH PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE ADMINISTRATIVE AGENT AND ITS SUCCESSORS AND PERMITTED ASSIGNS.  THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(e)    EACH PARTY HERETO HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND OF ANY STATE COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND ANY APPELLATE COURT FROM ANY THEREOF AND IRREVOCABLY AGREES THAT, SUBJECT TO THE ADMINISTRATIVE AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS.  EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.  EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED IN SECTION 17.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
16.Severability.  If for any reason any provision or provisions hereof are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or effect those portions of this Agreement which are valid.

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17.Notices.  Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give and serve upon any other party any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be given in the manner, and deemed received, as provided for in the Credit Agreement (notice to any Pledgor and Pledged Entity shall be deemed given when delivered to the Borrowers in accordance with the terms of the Credit Agreement).
18.Section Titles.  The Section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.
19.Counterparts.  This Agreement may be executed in any number of counterparts, which shall, collectively and separately, constitute one agreement.  Delivery of an executed signature page of this Agreement by facsimile transmission or electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.
20.Benefit of the Secured Parties.  All security interests granted or contemplated hereby shall be for the benefit of the Administrative Agent and the Secured Parties, and all proceeds or payments realized from the Pledged Collateral in accordance herewith shall be applied to the Secured Obligations in accordance with the terms of the Credit Agreement.
[Signature Page Follows]

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#4831-3075-4320 

IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be duly executed as of the date first written above.
PLEDGORS:
FORTEGRA FINANCIAL CORPORATION
By:      /s/ Richard S. Kahlbaugh
Name:   Richard S. Kahlbaugh 
Title: Chief Executive Officer and President
LOTSOLUTIONS, INC.
By:      /s/ Richard S. Kahlbaugh
Name:   Richard S. Kahlbaugh 
Title: Chief Executive Officer and President

[Signature Page to Pledge Agreement]
#4831-3075-4320 

ADMINISTRATIVE AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent
By  /s/ Charles N. Kauffman
Name:   Charles N. Kauffman
Title: Senior Vice President

[Signature Page to Pledge Agreement]
#4831-3075-4320 

SCHEDULE I
PLEDGED COLLATERAL
Part A: Pledged Shares
	
					
	Name and Address of Pledgor
	Pledged Entity
	Class 
of Stock
	Certificate 
Number(s)
	Number of Shares

	Fortegra Financial
	LOTS Intermediate Co. 
	Common 
	2
	1,000

	Corporation
	 
	 
	 
	 

	10151 Deerwood Park
	 
	 
	 
	 

	Boulevard
	 
	 
	 
	 

	Building 100, Suite 330
	 
	 
	 
	 

	Jacksonville, FL 32256
	 
	 
	 
	 

Part B : Pledged Indebtedness

	
					
	 
	 
	 
	Principal
	 

	Debt
	Name and
	Issuer of
	Amount of
	 

	Instrument
	Address of Pledgor
	Instrument
	Instrument
	Maturity Date

	 
	 
	 
	 
	 

	Secured
Promissory
Note
	LOTSolutions, Inc.
10151 Deerwood Park Boulevard
Building 100, Suite 330
Jacksonville, FL 32256
	James A.
Bialous and
Kimberly
Bialous
	$1,143,000.00 
	 August 1,
2016

	 
	 
	 
	 
	 

#4831-3075-4320 

SCHEDULE II 
 
UCC INFORMATION

	
					
	Pledgor
	Jurisdiction of Organization
	Organizational ID No.
	Type of Organization
	FEIN

	Fortegra Financial
Corporation
	Delaware
	4885848
	Corporation
	58-1461399

	LOTSolutions, Inc.
	Georgia
	K801853
	Corporation
	58-2369255

#4831-3075-4320 

EXHIBIT A
FORM OF PLEDGE AMENDMENT
This Pledge Amendment, dated _________________, ____, is delivered pursuant to Section 6(d) of the Pledge Agreement referred to below.  All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Pledge Agreement.  The undersigned hereby certify that the representations and warranties in Section 5 of the Pledge Agreement are true and correct as of the date hereof, as to the promissory notes, instruments and shares pledged pursuant to this Pledge Amendment.  The undersigned further agree that this Pledge Amendment may be attached to that certain Pledge Agreement, dated August 2, 2012, by and between the undersigned, as Pledgors, and Wells Fargo Bank, National Association, as the Administrative Agent (as amended, restated, amended and restated, supplemented or otherwise modified, the “Pledge Agreement”), and that the Pledged Shares and Pledged Indebtedness listed on this Pledge Amendment shall be and become a part of the Pledged Collateral referred to in said Pledge Agreement and shall secure all Secured Obligations referred to in said Pledge Agreement.
[PLEDGOR]
By:  _____________________________________ 
Name:  __________________________________ 
Title:  ___________________________________

	
					
	Name and 
Address of Pledgor
	Pledged Entity
	Class 
of Stock
	Certificate 
Number(s)
	Number of Shares

	 
	 
	 
	 
	 

	
					
	Name of Pledgor
	Pledged Instrument
	Initial Principal Amount
	Issue Date
	Maturity
Date

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