Document:

exv4w5

 

Exhibit 4.5

AMENDED AND RESTATED

SUBORDINATED NOTE

ALL INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS SUBORDINATED TO OTHER
INDEBTEDNESS PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE
SUBJECT TO THE TERMS OF, (1) SECTION 2.09 OF THE AMENDED AND RESTATED
SUBORDINATED LOAN AGREEMENT, AMENDED AND RESTATED
AS OF JULY 23, 2004, AMONG SPECIALTY UNDERWRITERS’ ALLIANCE, INC., AS THE
BORROWER (THE “BORROWER”), COURTNEY SMITH, PETER JOKIEL, WILLIAM LODER AND GARY
FERGUSON, AS SUBORDINATED LENDERS (THE “SUBORDINATED LENDERS”), AND FRIEDMAN,
BILLINGS, RAMSEY GROUP, INC. AND STANDARD AMERICAN INSURANCE LIMITED, AS THE
SENIOR LENDERS (THE “SENIOR LENDERS”), AND (2) THE AMENDED AND RESTATED
INTERCREDITOR AND SUBORDINATION AGREEMENT, AMENDED AND RESTATED AS OF JULY 23,
2004, AMONG THE BORROWER, THE SUBORDINATED LENDERS AND THE SENIOR LENDERS
(TOGETHER, THE “SUBORDINATION PROVISIONS”), AS THE SAME MAY BE AMENDED,
MODIFIED OR OTHERWISE SUPPLEMENTED FROM TIME TO TIME.

			
	 	 	 
	Up to $31,000
	 	As of December 12, 2003
	
	 	Amended and Restated as of July 23, 2004

FOR VALUE RECEIVED, the undersigned, SPECIALTY UNDERWRITERS’ ALLIANCE, INC., a
Delaware corporation, with a principal place of business located at 8585
Stemmons Fwy., Suite 200, South Tower, Dallas, Texas 75247 (the “Borrower”),
promises to pay to the order of GARY FERGUSON, an individual with an address of
P.O. Box 374, Cave Creek, Arizona 85327 (the “Subordinated Lender”) on or
before the Maturity Date, in lawful money of the United States of America, the
principal sums set forth on the Schedule of Advances attached hereto, which are
not to exceed at any one time THIRTY-ONE THOUSAND AND 00/100 DOLLARS
($31,000.00), plus interest at the times and in the amounts and manner as
provided in the Amended and Restated Subordinated Loan and Security Agreement
(as it may be supplemented and amended from time to time, the “Agreement”),
amended and restated as of July 23, 2004, among the Borrower, Courtney Smith,
Peter Jokiel, William Loder and Gary Ferguson as Subordinated Lenders, and
Friedman, Billings, Ramsey Group, Inc. and Standard American Insurance Limited,
as Senior Lenders, for limited purposes; provided, however, that the principal
sum evidenced by this Subordinated Note may exceed the maximum principal amount
specified above to the extent of any amounts added to the principal balance of
this Subordinated Note in respect of interest accrued on this Subordinated Note
prior to its Maturity Date, to the extent permitted pursuant to Section 2.02(a)
of the Agreement.

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MAXIMUM RATE OF INTEREST: It is intended that the rate of interest hereon
shall never exceed the maximum rate, if any, which may be legally charged on
this Loan evidenced by this Subordinated Note (“Maximum Rate”), and if the
provisions for interest contained in this Subordinated Note would result in a
rate higher than the Maximum Rate, interest shall nevertheless be limited to
the Maximum Rate and any amounts which may be paid toward interest in excess of
the Maximum Rate shall be applied to the reduction of principal, or, at the
option of the Subordinated Lender, returned to the Borrower.

DUE DATE: All indebtedness evidenced hereby not paid before the Maturity Date
shall be due and payable on the Maturity Date. Principal and interest payments
shall be due hereunder as described in the Agreement.

PLACE OF PAYMENT: All payments hereon shall be made, and all notices to the
Subordinated Lender required or authorized hereby shall be given, at the office
of the Subordinated Lender at the address designated in the heading of this
Subordinated Note, or to such other place as the Subordinated Lender may from
time to time direct by written notice to the Borrower.

PAYMENT AND EXPENSES OF COLLECTION: All amounts payable hereunder are payable
by wire transfer in immediately available funds to the account number specified
by the Subordinated Lender, in lawful money of the United States. Payments
remitted by the Borrower via wire transfer initiated after 3:00 p.m. New York
City time shall be deemed to be received on the next business day. The
Borrower agrees to pay all costs of collection when incurred, including,
without limiting the generality of the foregoing, reasonable attorneys’ fees
through appellate proceedings and allocated cost of in-house counsel, and to
perform and comply with each of the covenants, conditions, provisions and
agreements contained in every instrument now evidencing or securing said
indebtedness. If any suit or action be instituted to enforce this Subordinated
Note, the Borrower promises to pay, in addition to the cost and disbursements
otherwise allowed by Law, such sums as the court may adjudge reasonable
attorneys’ fees in such suit or action. This Note may be payable in shares of
Common Stock of the Borrower, as described in Section 2.05(c) of the Agreement.

SECURITY: This Subordinated Note is issued pursuant to the Agreement, and is
secured by a pledge of the Collateral described therein. Notwithstanding the
pledge of the Collateral, the Borrower hereby acknowledges, admits and agrees
that the Borrower’s obligations under this Subordinated Note are recourse
obligations of the Borrower to which the Borrower pledges his full faith and
credit.

DEFAULTS: Upon the occurrence of an Event of Default (as defined in the
Agreement), the Subordinated Lender shall have all rights and remedies set
forth in the Agreement, subject to the limitations of the Subordination
Provisions.

The failure to exercise any of the rights and remedies set forth in the
Agreement shall not constitute a waiver of the right to exercise the same or
any other option at any subsequent time in respect of the same event or any
other event. The acceptance by the Subordinated

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Lender of any payment hereunder which is less than payment in full of all
amounts due and payable at the time of such payment shall not constitute a
waiver of the right to exercise any of the foregoing rights and remedies at
that time or at any subsequent time or nullify any prior exercise of any such
rights and remedies without the express consent of the Subordinated Lender,
except as and to the extent otherwise provided by Law.

WAIVERS: The Borrower waives diligence, presentment, protest and demand and
also notice of protest, demand, dishonor and nonpayment of this Subordinated
Note, and expressly agrees that this Subordinated Note, or any payment
hereunder, may be extended from time to time, and consent to the acceptance of
further collateral, the release of any collateral for this Subordinated Note,
the release of any party primarily or secondarily liable hereon, and that it
will not be necessary for the Subordinated Lender, in order to enforce payment
of this Subordinated Note, first to institute or exhaust Lender’s remedies
against the Borrower or any other party liable hereon or against any collateral
for this Subordinated Note. None of the foregoing shall affect the liability
of the Borrower and any endorsers or guarantors hereof. No extension of time
for the payment of this Subordinated Note, or any installment hereof, made by
agreement by the Subordinated Lender with any person now or hereafter liable
for the payment of this Subordinated Note, shall affect the liability under
this Subordinated Note of the Borrower, even if the Borrower is not a party to
such agreement; provided, however, the Subordinated Lender and the Borrower, by
written agreement between them, may affect the liability of the Borrower.

TERMINOLOGY: Any reference herein to the Subordinated Lender shall be deemed
to include and apply to every subsequent holder of this Subordinated Note.
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Agreement. Words of masculine or neuter import shall be
read as if written in the neuter or masculine or feminine when appropriate.

AGREEMENT: Reference is made to the Agreement for provisions as to payments,
collateral and acceleration.

THIS SUBORDINATED NOTE IS GOVERNED BY THE PROVISIONS OF THE AGREEMENT WHICH IS
INCORPORATED HEREIN BY REFERENCE, AND IN THE EVENT ANY TERMS OF THIS
SUBORDINATED NOTE ARE INCONSISTENT WITH THE TERMS OF THE AGREEMENT, THE TERMS
OF THE AGREEMENT SHALL GOVERN THIS SUBORDINATED NOTE. NOTWITHSTANDING THE
FOREGOING SENTENCE, NO REFERENCE HEREIN TO THE AGREEMENT AND NO PROVISION OF
THIS SUBORDINATED NOTE OR OF THE AGREEMENT SHALL ALTER OR IMPAIR THE OBLIGATION
OF THE BORROWER, WHICH IS ABSOLUTE AND UNCONDITIONAL, TO PAY THE PRINCIPAL OF
AND INTEREST ON THIS SUBORDINATED NOTE AT THE RESPECTIVE TIMES AND AT THE RATES
HEREIN PRESCRIBED.

GOVERNING LAW: This Subordinated Note shall be governed by and construed in
accordance with the Laws of the Commonwealth of Virginia, without giving effect
to the conflict of laws rules therein. The parties hereto hereby consent and
agree that the

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Circuit Court of Arlington County, Virginia, or, at the Subordinated Lender’s
option, the United States District Court for the Eastern District of Virginia,
shall have exclusive jurisdiction to hear and determine any claims or disputes
pertaining to this Subordinated Note or to any matter arising out of or related
to this Subordinated Note. The Borrower expressly submits and consents in
advance to such jurisdiction in any action or suit commenced in any such court,
and hereby waives any objection which it may have based upon lack of personal
jurisdiction, improper venue or forum non conveniens and hereby consents to the
granting for such legal or equitable relief as is deemed appropriate by such
court. The Borrower irrevocably consents to the service of process by
registered or certified mail, postage prepaid, to it at its address given
above. Nothing in this Subordinated Note shall be deemed or operate to affect
the right of the Subordinated Lender to serve legal process in any other manner
permitted by Law, or to preclude the enforcement by the Subordinated Lender of
any judgment or order obtained in such forum or the taking of any action under
this Subordinated Note to enforce same in any other appropriate forum or
jurisdiction.

To the extent that the Borrower has or may hereafter acquire any immunity from
the jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to the Borrower or the
Borrower’s property, the Borrower hereby irrevocably waives such immunity in
respect of its obligations under this Subordinated Note.

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IN WITNESS WHEREOF, the Borrower has caused this Subordinated Note to be
executed by its duly authorized officer, as of the date and year first
mentioned above.

	 	 	 	 	 
	 	 	SPECIALTY UNDERWRITERS’ ALLIANCE, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Courtney Smith
	

	 	 	 	
 
	

	 	Name:	 	Courtney Smith
	

	 	 	 	
 
	

	 	Title:	 	President
	

	 	 	 	
 

[Signature Page to SUA/Gary Ferguson Amended and Restated Subordinated Note]

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Schedule of Advances

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Interest
	Date
	 	Amount
	 	Rate

	12/12/2003
	 	$	12,500	 	 	 	12.00	%
	 
	 	$	12,500	 	 	 	12.00	%
	 
	 	$	6,000	 	 	 	12.00	%

6exv4w6

 

Exhibit 4.6

SENIOR SECURED NOTE

			
	 	 	 
	Up to $1,450,000
	 	As of July 23, 2004          

FOR VALUE RECEIVED, the undersigned, SPECIALTY UNDERWRITERS’ ALLIANCE, INC., a
Delaware corporation, with a principal place of business located at 8585
Stemmons Fwy., Suite 200, South Tower, Dallas, Texas 75247 (the “Borrower”),
promises to pay to the order of STANDARD AMERICAN INSURANCE LIMITED, a Bermuda
company (“SAIL”) on or before the Maturity Date, in lawful money of the United
States of America, the principal sums set forth on the Schedule of Advances
attached hereto, which are not to exceed at any one time ONE MILLION FOUR
HUNDRED FIFTY AND 00/100 DOLLARS ($1,450,000), plus interest at the times and
in the amounts and manner as provided in the Amended and Restated Senior Loan
and Security Agreement (as it may be supplemented and amended from time to
time, the “Agreement”), amended and restated as of July 23, 2004, between the
Borrower, the Holder named above and the other senior lender identified therein
(together with such Holder, the “Senior Lenders”), and acknowledged by Courtney
Smith, Peter Jokiel, William Loder and Gary Ferguson; provided, however, that
the principal sum evidenced by this Senior Secured Note may exceed the maximum
principal amount specified above to the extent of any amounts added to the
principal balance of this Senior Secured Note in respect of interest accrued on
this Senior Secured Note prior to the Maturity Date, to the extent permitted
pursuant to Sections 2.02 and 2.04 of the Agreement.

MAXIMUM RATE OF INTEREST: It is intended that the rate of interest hereon
shall never exceed the maximum rate, if any, which may be legally charged on
this Loan evidenced by this Senior Secured Note (“Maximum Rate”), and if the
provisions for interest contained in this Senior Secured Note would result in a
rate higher than the Maximum Rate, interest shall nevertheless be limited to
the Maximum Rate and any amounts which may be paid toward interest in excess of
the Maximum Rate shall be applied to the reduction of principal, or, at the
option of the holder of this Senior Secured Note (the “Holder”), returned to
the Borrower.

DUE DATE: All indebtedness evidenced hereby not paid before the Maturity Date
shall be due and payable on the Maturity Date. Principal and interest payments
shall be due hereunder as described in the Agreement.

PLACE OF PAYMENT: All payments hereon shall be made, and all notices to the
Holder required or authorized hereby shall be given, at the office of the
Holder at the address designated in the heading of this Senior Secured Note, or
to such other place as the Holder may from time to time direct by written
notice to the Borrower.

PAYMENT AND EXPENSES OF COLLECTION: All amounts payable hereunder are payable
by wire transfer in immediately available funds to the account number specified
by the Holder, in lawful money of the United States. Payments remitted by the
Borrower via wire transfer initiated after 3:00 p.m. New York City time shall
be deemed to be received on the next business day. The Borrower agrees to pay
all costs of collection when incurred, including, without

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limiting the generality of the foregoing, reasonable attorneys’ fees through
appellate proceedings and allocated cost of in-house counsel, and to perform
and comply with each of the covenants, conditions, provisions and agreements
contained in every instrument now evidencing or securing said indebtedness. If
any suit or action be instituted to enforce this Senior Secured Note, the
Borrower promises to pay, in addition to the cost and disbursements otherwise
allowed by Law, such sums as the court may adjudge reasonable attorneys’ fees
in such suit or action.

SECURITY: This Senior Secured Note is issued pursuant to the Agreement, and is
secured by a pledge of the Collateral described therein. Notwithstanding the
pledge of the Collateral, the Borrower hereby acknowledges, admits and agrees
that the Borrower’s obligations under this Senior Secured Note are recourse
obligations of the Borrower to which the Borrower pledges his full faith and
credit.

DEFAULTS: Upon the occurrence of an Event of Default (as defined in the
Agreement), the Holder shall have all rights and remedies set forth in the
Agreement.

The failure to exercise any of the rights and remedies set forth in the
Agreement shall not constitute a waiver of the right to exercise the same or
any other option at any subsequent time in respect of the same event or any
other event. The acceptance by the Holder of any payment hereunder which is
less than payment in full of all amounts due and payable at the time of such
payment shall not constitute a waiver of the right to exercise any of the
foregoing rights and remedies at that time or at any subsequent time or nullify
any prior exercise of any such rights and remedies without the express consent
of the Holder, except as and to the extent otherwise provided by Law.

WAIVERS: The Borrower waives diligence, presentment, protest and demand and
also notice of protest, demand, dishonor and nonpayment of this Senior Secured
Note, and expressly agrees that this Senior Secured Note, or any payment
hereunder, may be extended from time to time, and consent to the acceptance of
further collateral, the release of any collateral for this Senior Secured Note,
the release of any party primarily or secondarily liable hereon, and that it
will not be necessary for the Holder, in order to enforce payment of this
Senior Secured Note, first to institute or exhaust the Holder’s remedies
against the Borrower or any other party liable hereon or against any collateral
for this Senior Secured Note. None of the foregoing shall affect the liability
of the Borrower and any endorsers or guarantors hereof. No extension of time
for the payment of this Senior Secured Note, or any installment hereof, made by
agreement by the Holder with any person now or hereafter liable for the payment
of this Senior Secured Note, shall affect the liability under this Senior
Secured Note of the Borrower, even if the Borrower is not a party to such
agreement; provided, however, the Senior Lenders and the Borrower, by written
agreement between them, may affect the liability of the Borrower.

TERMINOLOGY: Any reference herein to the Holder shall be deemed to include and
apply to every subsequent holder of this Senior Secured Note. Capitalized
terms used but not defined herein shall have the meanings assigned to such
terms in the Agreement. Words of masculine or neuter import shall be read as
if written in the neuter or masculine or feminine when appropriate.

AGREEMENT: Reference is made to the Agreement for provisions as to payments,
collateral and acceleration.

2

 

THIS SENIOR SECURED NOTE IS GOVERNED BY THE PROVISIONS OF THE AGREEMENT WHICH
IS INCORPORATED HEREIN BY REFERENCE, AND IN THE EVENT ANY TERMS OF THIS SENIOR
SECURED NOTE ARE INCONSISTENT WITH THE TERMS OF THE AGREEMENT, THE TERMS OF THE
AGREEMENT SHALL GOVERN THIS SENIOR SECURED NOTE. NOTWITHSTANDING THE FOREGOING
SENTENCE, NO REFERENCE HEREIN TO THE AGREEMENT AND NO PROVISION OF THIS SENIOR
SECURED NOTE OR OF THE AGREEMENT SHALL ALTER OR IMPAIR THE OBLIGATION OF THE
BORROWER, WHICH IS ABSOLUTE AND UNCONDITIONAL, TO PAY THE PRINCIPAL OF AND
INTEREST ON THIS SENIOR SECURED NOTE AT THE RESPECTIVE TIMES AND AT THE RATES
HEREIN PRESCRIBED.

GOVERNING LAW: This Senior Secured Note shall be governed by and construed in
accordance with the Laws of the Commonwealth of Virginia, without giving effect
to the conflict of laws rules therein. The parties hereto hereby consent and
agree that the Circuit Court of Arlington County, Virginia, or, at the Senior
Lenders’ option, the United States District Court for the Eastern District of
Virginia, shall have exclusive jurisdiction to hear and determine any claims or
disputes pertaining to this Senior Secured Note or to any matter arising out of
or related to this Senior Secured Note. The Borrower expressly submits and
consents in advance to such jurisdiction in any action or suit commenced in any
such court, and hereby waives any objection which it may have based upon lack
of personal jurisdiction, improper venue or forum non conveniens and hereby
consents to the granting for such legal or equitable relief as is deemed
appropriate by such court. The Borrower irrevocably consents to the service of
process by registered or certified mail, postage prepaid, to it at its address
given above. Nothing in this Senior Secured Note shall be deemed or operate to
affect the right of the Holder to serve legal process in any other manner
permitted by Law, or to preclude the enforcement by the Holder of any judgment
or order obtained in such forum or the taking of any action under this Senior
Secured Note to enforce same in any other appropriate forum or jurisdiction.

To the extent that the Borrower has or may hereafter acquire any immunity from
the jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to the Borrower or the
Borrower’s property, the Borrower hereby irrevocably waives such immunity in
respect of its obligations under this Senior Secured Note.

3

 

IN WITNESS WHEREOF, the Borrower has caused this Senior Secured Note to be
executed by its duly authorized officer, as of the date and year first
mentioned above.

	 	 	 	 	 
	 	 	SPECIALTY UNDERWRITERS’ ALLIANCE, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Courtney Smith
	

	 	 	 	
 
	

	 	Name:	 	Courtney Smith
	

	 	 	 	
 
	

	 	Title:	 	President
	

	 	 	 	
 

[Signature Page for SUA/SAIL Senior Secured Note]

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Schedule of Advances

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Interest
	Date
	 	Amount
	 	Rate

	7/23/2004

	 	$	1,450,000	 	 	 	12.00	%

5

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