STOCK PLEDGE AGREEMENT
Exhibit 4.5
Execution Version
This STOCK PLEDGE AGREEMENT (this “Agreement”) is made as of October 27, 2010 by Bancinsurance
Corporation, an Ohio corporation (the “Pledgor”), in favor of Fifth Third Bank, an Ohio banking
corporation (the “Bank”).
Background Information
A. The Pledgor is the owner of 100% of the issued and outstanding shares of common stock of
Ohio Indemnity Company, an Ohio domiciled stock, property and casualty insurance company (the
“Issuer”).
B. The Bank and the Pledgor are entering into a certain Credit Agreement of even date herewith
(the “Credit Agreement”) pursuant to which the Bank has agreed to extend the following credit
facilities to the Pledgor: (1) a term loan in the original principal amount of $10,000,000 (“Term
Loan”); and (2) a revolving line of credit with a maximum aggregate principal amount of $5,000,000
(the “Line of Credit”, and collectively with the Term Loan, the “Loans”).
C. The execution of this Agreement and the delivery of the Pledged Stock (as hereinafter
defined) to the Bank are conditions precedent to the Bank’s obligation to extend the Loans.
D. To induce the Bank to extend the Loans and in order to secure the payment and performance
of the Obligations (as hereinafter defined), Pledgor has agreed to pledge to Bank all of the
Collateral (as hereinafter defined) now or hereafter owned or acquired by Pledgor as security for
the Obligations, subject to the terms of this Agreement.
E. The Pledgor is a member of a holding Company system as defined in Ohio Revised Code Section
3901.32; accordingly, Pledgor is not pledging any property which would not be permitted under the
Insurance Laws of the State of Ohio.
Provisions
NOW, THEREFORE, in consideration of the premises and in order to induce the Bank to extend the
Loans, the Pledgor hereby agrees with the Bank as follows:
Section 1. Defined Terms.
Unless otherwise defined herein, terms defined in the Credit Agreement shall have such defined
meanings when used herein.
“Collateral” shall mean all property at any time pledged or required to be pledged to
the Bank hereunder, including the Pledged Stock, and all payments to be made by the Issuer pursuant
thereto, income therefrom and proceeds thereof.
“Obligations” means all unpaid principal of and accrued and unpaid interest on the
Term Loan, all accrued and unpaid fees and all expenses, reimbursements, indemnities and any other
obligations of the Pledgor to the Bank or to any indemnified party related to the Term Loan.
“Pledged Stock” shall mean all of the shares of common stock of the Issuer owned by
the Pledgor evidenced by share certificate number(s) 87 and 88, together with all shares,
certificates, options, rights or other distributions issued as an addition to, in substitution or
in exchange for, or on account of, any such shares, and all proceeds of all the foregoing, now or
hereafter owned or acquired by the Pledgor.
Section 2. Pledge.
(a) The Pledgor hereby pledges, assigns, hypothecates, transfers and delivers to the Bank all
Collateral including the Pledged Stock and agrees to pledge all additional shares of capital stock
of the Issuer that the Pledgor may hereafter acquire with respect thereto, and grants to the Bank a
first and best lien on and security interest in (i) the Pledged Stock; (ii) all certificates,
shares, notes, obligations, distributions, securities and other property issued or delivered from
time to time in lieu of or in substitution for or with respect to the Pledged Stock; (iii) all
present and future security and collateral for any of the foregoing; and (iv) all payments or other
proceeds under or with respect to any of the foregoing, as collateral security for the due and
punctual performance by the Pledgor of all its obligations under this Agreement and the due and
punctual payment and performance by the Pledgor of all Obligations.
(b) The Pledgor shall deliver to the Bank the certificate(s) for the Pledged Stock and a stock
transfer power(s) in the form of the Stock Transfer Power attached hereto as Exhibit A duly
endorsed in blank simultaneously herewith.
(c) At any time the Bank, at its option, may have any part or all of the Pledged Stock
registered in its name or that of its nominee, and the Pledgor hereby covenants that, upon the
Bank’s request, the Pledgor will cause the Issuer, the transfer agent or registrar of the Pledged
Stock to effect such registration, subject to compliance with Insurance Laws which require notices
and consents, including but not limited to the approval of a Form A by the Ohio Department of
Insurance and any other applicable state insurance department. If that shall be done prior to an
Event of Default (as defined in Section 5), the Pledgor shall nevertheless retain all voting rights
with respect to the Pledged Stock, and, for that purpose, the Bank shall execute and deliver to the
Pledgor all necessary proxies (which proxies shall in any event expire automatically upon the
occurrence of an Event of Default and the Bank’s compliance with all Insurance Laws and its receipt
of all required approvals thereunder). Subject to the Bank’s compliance with Insurance Laws and
the receipt of all required approvals, immediately and without further notice, upon the occurrence
of an Event of Default, whether or not the Pledged Stock shall have been registered in the name of
the Bank or its nominee, the Bank or its nominee shall have, with respect to the Pledged Stock, the
right to exercise all voting rights as to the Pledged Stock, all other corporate rights and all
conversion, exchange, subscription or other rights, privileges or options pertaining thereto as if
it were the absolute owner thereof, including, without limitation, the right to exchange any or all
of the Pledged Stock upon the merger,
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consolidation, reorganization, recapitalization or other readjustment of the issuer thereof,
or upon the exercise by such issuer of any right, privilege or option pertaining to any of the
Pledged Stock, and, in connection therewith, to deliver any of the Pledged Stock to any committee,
depository, transfer agent, registrar or other designated agency upon such terms and conditions as
it may determine, all without liability except to account for property actually received by it;
provided, however, that (i) the Bank shall have no duty to exercise any of the aforesaid rights,
privileges or options and shall not be responsible for any failure to do so or delay in so doing;
and (ii) the Bank may by written notice to the Pledgor relinquish, either partially or completely
in accordance with any terms or conditions the Bank may set forth in such notice, any or all voting
rights the Bank may acquire pursuant to this Section 2(c). The Bank acknowledges that its
enforcement rights are limited by Insurance Laws, and more specifically, that prior approval of
state insurance regulators may be required prior to any action associated with the Pledged Stock.
(d) So long as no Event of Default shall have occurred, the Pledgor shall have the right to
receive and retain all cash dividends and other cash payments with respect to the Pledged Stock as
permitted by the Credit Agreement. Upon the occurrence of an Event of Default, the right of the
Pledgor to receive any such cash dividends and other cash payments shall terminate immediately.
Section 3. Notice to the Issuer and Registrar.
Immediately upon the execution of this Agreement, the Pledgor shall give notice of the pledge
of the Pledged Stock pursuant to the terms hereof, in the form of the Notice of Pledge attached
hereto as Exhibit B, to the Issuer and the Issuer’s stock registrar/transfer agent, if any.
Section 4. Distributions, etc.
If the Pledgor shall become entitled to receive or shall receive, in connection with any of
the Pledged Stock, any Collateral, including, without limitation:
(a) stock certificates, including, but without limitation, any certificates representing a
stock dividend issued in connection with any increase or reduction of capital, reclassification,
merger, consolidation, sale of assets, combination of shares, stock split, spin-off or split-off;
(b) options, warrants or rights, whether as an addition to, or in substitution or in exchange
for, any of the Pledged Stock, or otherwise; or
(c) dividends or distributions payable in money (subject to the right of the Pledgor to
receive and retain such dividends and distributions in accordance with Section 2(d) hereof) or
other property, including securities issued by any entity other than the Issuer,
then the Pledgor shall accept the same as the Bank’s agent and hold the same in trust on behalf of
and for the benefit of the Bank, segregated from the other assets of the Pledgor and deliver the
same forthwith to the Bank, in the exact form received, with the endorsement of the Pledgor when
necessary and/or appropriate undated powers, duly executed in blank, to be held by the
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Bank, subject to the terms hereof, as additional collateral security for the Obligations. Any sums
paid upon or in respect of the Pledged Stock or other Collateral upon the liquidation or
dissolution of the Pledgor or the Issuer shall be paid over to the Bank, to be held by it in trust
as additional collateral security for the Obligations. All sums of money and property so paid or
distributed in respect of the Pledged Stock or other Collateral which are received by the Pledgor
shall, until paid or delivered to the Bank, be held by the Pledgor in trust, segregated from the
other assets of the Pledgor, as additional collateral security for the Obligations.
Section 5. Events of Default.
(a) The occurrence of any of the following events shall constitute an “Event of Default”:
(i) the Pledgor shall default in the observance or performance of any term, covenant or
agreement contained herein;
(ii) the Pledgor shall default in the observance or performance of any term, covenant or
agreement contained in the Credit Agreement or any other Loan Document which is not cured within
any applicable cure period; or
(iii) any Default as such terms are defined in the Credit Agreement shall occur and be
continuing or a “default” or “event of default” in any other Loan Document as such terms are
defined therein shall occur and be continuing.
(b) Upon the occurrence and during the continuance of any Event of Default, the Bank, without
demand of performance or other demand, advertisement or notice of any kind (except the notice
specified below regarding public or private sale) to or upon the Pledgor or any other person (all
and each of which demands, advertisements and/or notices are hereby expressly waived), may
forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Collateral, or any part thereof, in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or at the Bank’s offices or
elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any credit risk, with the
right to the Bank upon any such sale or sales, public or private, to purchase the whole or any part
of said Collateral so sold, free of any right or equity of redemption in the Pledgor, which right
or equity is hereby expressly waived or released. The Bank shall apply the net proceeds of any
such collection, recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to the care, safekeeping
or otherwise of any and all of the Collateral, including reasonable attorneys’ fees and legal
expenses, to the payment in whole or in part of the Obligations in such order as the Bank may
elect, and only after so paying over such net proceeds and after the payment by the Bank of any
other amount required by any provision of law, need the Bank account for the surplus, if any, to
the Pledgor. The Pledgor agrees that, to the extent permitted by law, the Bank need not give more
than 10 days’ notice of the time and place of any public sale or of the time after which a
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private sale or other intended disposition is to take place and that such notice is reasonable
notification of such matters. No notification need be given to the Pledgor if the Pledgor has
signed after default a statement renouncing or modifying any right to notification of sale or other
intended disposition. In addition to the rights and remedies granted to it in this Agreement and
in any other instrument or agreement securing, evidencing or relating to any of the Obligations,
the Bank shall have all the rights and remedies of a secured party under the Uniform Commercial
Code as adopted in the State of Ohio. All waivers by the Pledgor of rights (including rights to
notice) and all rights and remedies afforded the Pledgor herein, and all other provisions of this
Agreement, are expressly made subject to any applicable mandatory provisions of law limiting, or
imposing conditions (including conditions as to reasonableness) upon, such waivers or the
effectiveness thereof or any such rights and remedies. Any sale or other disposition of the
Collateral shall be in compliance with all provisions of applicable law (including applicable
Insurance Laws, securities laws and applicable provisions of the Uniform Commercial Code of the
State of Ohio). The Bank may comply with any applicable state or federal law requirements in
connection with any disposition of the Collateral and compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral. The Bank may
disclaim any warranties that might arise in connection with the sale or other disposition of the
Collateral and has no obligation to provide any warranties at such time.
Section 6. The Bank’s Appointment as Attorney-in-Fact.
(a) The Pledgor hereby irrevocably constitutes and appoints the Bank and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Pledgor and in the name of the Pledgor or
in its own name, from time to time in the Bank’s discretion, for the purpose of carrying out the
actions and to execute any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement and, without limiting the generality of the foregoing,
hereby gives the Bank the power and right, on behalf of the Pledgor, without notice to or assent by
the Pledgor to do the following: (i) to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under the Collateral; (ii) in the name of the
Pledgor or its own name or otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payments of moneys due under the
Collateral; (iii) to file any claim or to take any other action or proceeding in any court of law
or equity or otherwise deemed appropriate by the Bank for the purpose of collecting any and all
such moneys due under the Collateral whenever payable; (iv) to pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened against the Collateral;
(v) to direct any party liable for any payment under the Collateral to make payment of any and all
moneys due and to become due thereunder directly to the Bank or as the Bank shall direct; (vi) to
receive payment of any receipt for any and all moneys, claims and other amounts due and to become
due at any time in respect of or arising out of any Collateral; (vii) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect
the Collateral or any part thereof and to enforce any other right to respect of the Collateral;
(viii) to defend any suit, action or proceeding brought against the Pledgor with respect to any
Collateral; and (ix) to settle, compromise or adjust any suit, action or proceeding described above
and, in connection therewith, to give such
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discharges or releases as the Bank may deem appropriate, at the Pledgor’s expense, at any
time, or from time to time, all acts and things which the Bank deems necessary to protect, preserve
or realize upon the Collateral and the Bank’s security interest therein, in order to effect the
intent of this Agreement, all as fully and effectively as the Pledgor might do.
The Pledgor hereby ratifies all that said attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is a power coupled with an interest and shall be
irrevocable.
(b) The powers conferred on the Bank hereunder are solely to protect its interests in the
Collateral and shall not impose any duty upon it to exercise any such powers. The Bank shall be
accountable only for amounts that it actually receives as a result of the exercise of such powers
and neither it nor any of its officers, directors, employees or agents shall be responsible to the
Pledgor for any act or failure to act.
(c) The Pledgor also authorizes the Bank, at any time and from time to time, to execute, in
connection with any sale of the Collateral, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
Section 7. Representations and Warranties of the Pledgor.
The Pledgor represents and warrants that:
(a) the Pledgor is the legal record and beneficial owner of the Pledged Stock, subject to no
pledge, lien, mortgage, hypothecation, security interest, charge, option or other encumbrance
whatsoever, except the lien and security interest created by this Agreement;
(b) the Pledged Stock constitutes 100% of the presently issued and outstanding shares of
common stock of the Issuer;
(c) subject to restrictions under Insurance Laws, the Pledgor has full power, authority and
legal right to pledge, and grant a security interest in, the Pledged Stock and the other Collateral
pursuant to this Agreement;
(d) this Agreement constitutes a legal, valid and binding obligation of the Pledgor, and is
enforceable against the Pledgor in accordance with its terms;
(e) except for the restrictions under Insurance Laws, no consent of any other person or
entity, including the Issuer, and no consent, license, permit, approval or authorization or,
exemption by, notice or report to, or registration, filing or declaration with, any governmental
authority, domestic or foreign, is required to be obtained by Pledgor in connection with the
execution, delivery or performance of this Agreement or the grant of the security interest in and
pledge of the Pledged Stock hereunder, in each case which has not been obtained or made, as the
case may be, and is not in full force and effect;
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(f) the execution, delivery and performance of this Agreement will not violate any provision
of any applicable law or regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of the articles of incorporation or
the code of regulations of the Issuer or of any securities issued by the Issuer, or of any
mortgage, indenture, lease, contract, or other agreement, instrument or undertaking to which the
Pledgor or the Issuer is a party or which purports to be binding upon the Pledgor or the Issuer, or
upon any of the Pledgor’s or the Issuer’s assets, and will not result in the creation or imposition
of any lien, charge or encumbrance on or security interest in any of the assets of the Pledgor or
the Issuer, except as contemplated by this Agreement; and
(g) no litigation, investigation or proceeding of or before any arbitrator or governmental
authority is pending or, to the knowledge of the Pledgor, threatened by or against the Pledgor or
the Issuer, or against any of his or its properties or revenues, with respect to this Agreement.
Section 8. Covenants of the Pledgor.
The Pledgor covenants and agrees that, subject to compliance with Insurance Laws:
(a) the Pledgor shall defend the right, title and security interest of the Bank in and to the
Pledged Stock, the proceeds thereof and all other Collateral against the claims and demands of all
persons whomsoever;
(b) the Pledgor shall have like title to and right to pledge any other property at any time
hereafter pledged to the Bank as Collateral hereunder and will likewise defend the right of the
Bank thereto and security interest therein;
(c) the Pledgor shall not sell, convey or otherwise dispose of any of the Pledged Stock or
other Collateral or any interest therein or create, incur or permit to exist any pledge, mortgage,
lien, charge, encumbrance or any security interest whatsoever in, or with respect to, any of the
Pledged Stock, any other Collateral, or the proceeds thereof, other than that created hereby; and
(d) the Pledgor shall not consent to, approve of or permit the issuance of any (i) additional
shares of any class of capital stock by the Issuer; (ii) securities convertible voluntarily by the
holder thereof or automatically upon the occurrence or nonoccurrence of any event or condition
into, or exchangeable for, any such shares; or (iii) warrants, options, rights or other commitments
entitling any person or entity to purchase or otherwise acquire any such shares.
Section 9. Limitation of Liability.
Except as set forth in this Agreement, beyond the exercise of reasonable care to assure the
safe custody of the Pledged Stock while held hereunder, the Bank shall have no duty or liability to
preserve rights pertaining thereto and shall be relieved of all responsibility for the Pledged
Stock upon surrendering it or tendering surrender of it to the Pledgor in accordance with the terms
hereof.
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Section 10. Further Assurances.
The Pledgor agrees that at any time and from time to time upon the written request of the
Bank, the Pledgor will execute and deliver such further documents and do such further acts and
things as the Bank may reasonably request in order to affect the purposes of this Agreement. The
Bank agrees that at any time and from time to time upon the written request of the Pledgor, the
Bank will execute and deliver such further documents and do such further acts and things as the
Pledgor may reasonably request in order to affect the purposes of this Agreement or compliance with
Insurance Laws.
Section 11. Severability.
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
Section 12. No Waiver; Cumulative Remedies.
The Bank shall not by any act, delay, omission or otherwise be deemed to have waived any of
its rights or remedies hereunder and no waiver shall be valid unless in writing, signed by the
Bank, and then only to the extent therein set forth. A waiver by the Bank of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Bank
would otherwise have on any future occasion. No failure to exercise, nor any delay in exercising
on the part of the Bank, any right, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided are cumulative and may be exercised singly or concurrently, and
are not exclusive of any rights or remedies provided by law or agreement to Bank.
Section 13. Waivers, Amendments.
None of the terms or provisions of this Agreement may be waived, altered, modified or amended
except by an instrument in writing, duly executed by the Bank and the Pledgor. This Agreement and
all obligations of the Pledgor hereunder shall be binding upon the Pledgor’s heirs, personal
representatives, successors and permitted assigns, and shall, together with the rights and remedies
of the Bank hereunder, inure to the benefit of the Bank and its successors and assigns; provided,
however, that the Pledgor may not assign this Agreement without the prior written consent of the
Bank.
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Section 14. Amendments, Modifications and Waivers with Respect to Obligations.
The Pledgor hereby consents that, without the necessity of any reservation of rights against
it, and without notice to or further assent by the Pledgor, any demand for payment of any of the
Obligations made by the Bank may be rescinded by the Bank and any of the Obligations continued, and
the Obligations, or the liability of any party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered, or released by the Bank, and the Notes, the Credit Agreement, any other Loan Documents
and any collateral in connection therewith may be amended, modified, supplemented, extended,
restated, replaced or terminated, in whole or in part, and the security at any time held by the
Bank for the payment of the Obligations may be sold, exchanged, waived, surrendered or released,
all without the necessity of any reservation of rights against the Pledgor and without notice to or
further assent by the Pledgor, which will remain bound hereunder, notwithstanding any such renewal,
extension, modification, acceleration, compromise, amendment, supplement, extension, restatement,
replacement, termination, sale, exchange, waiver, surrender or release. Except as set forth in
Section 20 of this Agreement, the Bank shall have no obligation to protect, secure, perfect or
insure any other collateral security document or property subject thereto at any time held as
security for the Obligations. The Pledgor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of reliance of the Bank upon
this Agreement, and the Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred in reliance upon this Agreement, and all dealings between the
Pledgor and the Bank shall likewise be conclusively presumed to have been made or consummated in
reliance upon this Agreement. The Pledgor waives diligence, presentment, protest, notice of intent
to accelerate and notice of acceleration, demand for payment and notice of default or nonpayment to
or upon the Pledgor with respect to the Obligations.
Section 15. Reinstatement.
This Agreement shall remain in full force and effect and continue to be effective should any
petition be filed by or against the Pledgor for liquidation or reorganization, should the Pledgor
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 the Pledgor’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
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 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, is rescinded, reduced, restored
or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
Section 16. Indemnity.
Except for the expenses related to a loss of the Pledged Stock by the Bank as set forth in
Section 20, the Pledgor hereby agrees to indemnify, pay and hold harmless Bank and the officers,
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directors, employees and counsel of Bank (collectively, the “Indemnitees”) from and against
any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and
disbursements of counsel for such Indemnitee) in connection with any investigative, administrative
or judicial proceeding, whether or not such Indemnitee shall be designated a party thereto and
including any such proceeding initiated by or on behalf of the Pledgor or the Issuer, which may be
imposed on, incurred by or asserted against such Indemnitee as a result of or in connection with
this Agreement or the enforcement by Bank of its rights and remedies hereunder, except that the
Pledgor shall have no obligation hereunder to an Indemnitee with respect to any liability resulting
from the gross negligence or willful misconduct of such Indemnitee, as determined by a court of
competent jurisdiction. To the extent that the undertaking set forth in the immediately preceding
sentence may be unenforceable, the Pledgor shall contribute the maximum portion which the Pledgor
is permitted to pay and satisfy under applicable law to the payment and satisfaction of all such
indemnified liabilities incurred by the Indemnitees.
Section 17. Governing Law.
This Agreement shall be construed in accordance with the internal laws (but without regard to
the conflict of laws provisions) of the State of Ohio, but giving effect to federal laws applicable
to national banks.
Section 18. Consent to Jurisdiction.
The Pledgor hereby irrevocably submits to the non exclusive jurisdiction of any United States
federal or Ohio state court sitting in Columbus, Ohio in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents and the Pledgor hereby irrevocably
agrees that all claims in respect of such action or proceeding may be heard and determined in any
such court and irrevocably waives any objection it may now or hereafter have as to the venue of any
such suit, action or proceeding brought in such a court or that such court is an inconvenient
forum. Nothing herein shall limit the right of the Bank to bring proceedings against the Pledgor
in the courts of any other jurisdiction. Any judicial proceeding by the Pledgor against the Bank
or any Affiliate of the Bank involving, directly or indirectly, any matter in any way arising out
of, related to, or connected with this Agreement or any other Loan Document shall be brought only
in a court in Columbus, Ohio.
Section 19. Notices.
Notices from one party to another relating to this Agreement shall be deemed effective if
given in the manner as provided in the Credit Agreement.
Section 20. Continuing Security Interest.
This Agreement shall create a continuing security interest in the Collateral and shall remain
in full force and effect until the indefeasible payment and satisfaction in full of the Term Loan,
at which point this Agreement shall terminate. The Bank shall deliver to the Pledgor, upon
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termination of this Agreement such of the Pledged Stock as shall not have been sold or
otherwise disposed of pursuant to this Agreement. Upon termination of this Agreement, the Pledged
Stock shall be delivered to Pledgor within ten (10) Business Days thereof.
Section 21. Registration Rights.
If any of the Pledged Stock is not registered under the Securities Act of 1933, as amended,
and the Issuer proposes to register any of its securities, the Pledgor will give the Bank notice of
that fact. In addition, and at no cost to the Bank, the Pledgor will use its best efforts to
induce the Issuer to register the Pledged Stock so that they may be disposed of by public sale or
other public disposition. Upon the completion of registration, the Pledgor will deliver
certificates without any restrictive legend in exchange for the unregistered Pledged Stock. The
Pledgor shall indemnify and hold the Bank harmless against any loss, claim, damage or liability
arising out of the registration process, and will reimburse Bank for any legal or other expenses
incurred by the Bank as a result.
Section 22. WAIVER OF JURY TRIAL.
THE PLEDGOR AND THE BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
Section 23. Waiver of Subrogation; Other Waivers.
The Pledgor expressly waives any and all rights of subrogation, contribution, reimbursement,
indemnity, exoneration, implied contract, recourse to security or any other claim (including any
claim, as that term is defined in the Federal Bankruptcy Code, and any amendments) which it may now
have or later acquire against any other party directly or contingently liable for the Obligations
arising from the existence or performance of the Pledgor’s obligations under this Agreement, until
the Obligations and all indebtedness and amounts secured hereby are indefeasibly paid in full. The
Pledgor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest
extent permitted by law, any notice not provided for herein, as well as any requirement that at any
time any action be taken by any party against any other party. The Pledgor hereby waives all
defenses including but not limited to all defenses based upon suretyship and impairment of
collateral.
Section 24. Agreement Unconditional.
The obligations of the Pledgor hereunder shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or otherwise affected
by:
(a) any extension, renewal, settlement, compromise, waiver or release in respect of any of the
indebtedness and amounts secured hereby, by operation of law or otherwise, or any
11
obligation of any
other party with respect to any of the indebtedness and amounts secured hereby, or any Event of
Default;
(b) any modification or amendment of or supplement to the Credit Agreement or any other Loan
Document;
(c) any release, nonperfection or invalidity of any direct or indirect security for any
obligation of any other party under the Credit Agreement or any other Loan Document, or any
obligations of any other party with respect to any of the indebtedness and amounts secured hereby,
or any action or failure to act by the Bank or any affiliate of the Bank with respect to any
property securing the indebtedness and amounts secured hereby;
(d) any change in the corporate or other existence, structure or ownership of any other party
with respect to any of the indebtedness and amounts secured hereby, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any other party with respect to the
indebtedness and amounts secured hereby, or its assets or any resulting release or discharge of any
obligation of any other party with respect to any of the indebtedness and amounts secured hereby;
(e) the existence of any claim, setoff or other rights which the Pledgor may have at any time
against any other party with respect to any of the indebtedness and amounts secured hereby, the
Bank or any other party, whether in connection herewith or any unrelated transactions;
(f) any invalidity or unenforceability relating to or against any other party with respect to
any of the indebtedness and amounts secured hereby, for any reason related to the Credit Agreement
or the other Loan Documents, or any provision of applicable law or regulation purporting to
prohibit the payment by any other party with respect to any of the all indebtedness and amounts
secured hereby; or
(g) any other act or omission to act or delay of any kind by the Bank or any other party or
any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute
a legal or equitable discharge of the Pledgor’s obligations hereunder or its grant of the lien and
security interest in the Collateral hereunder.
[Balance of page intentionally left blank]
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IN WITNESS WHEREOF, the Pledgor has executed and delivered this Agreement as of the date first
above written.
| PLEDGOR: | ||||||
| Bancinsurance Corporation, an Ohio corporation |
||||||
| By: | ||||||
Chief Financial Officer, Treasurer and Secretary |
||||||
Address: 000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxx 00000 |
||||||
13
EXHIBIT A
Stock Transfer Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Fifth Third Bank,
an Ohio banking corporation, thirty-seven thousand three hundred thirty-two (37,332) shares of the
common stock of Ohio Indemnity Company, (the “Company”), standing in its name on the books of the
Company represented by Certificate Nos. 87 and 88, and does hereby irrevocably constitute and
appoint to transfer the said units on the books of the Company,
with full power of substitution in the premises.
| Dated: October ____, 2010 | Bancinsurance Corporation, an Ohio corporation |
|||
| By: | ||||
| Xxxxxxx X. Xxxxx, Vice President, | ||||
| Chief Financial Officer, Treasurer and Secretary | ||||
EXHIBIT B
Notice of Pledge
October ___, 2010
| TO: | Ohio Indemnity Company 000 X. Xxxxx Xxxxxx, 0xx Xxxxx Xxxxxxxx, Xxxx 00000 Attn: President |
|
| RE: | Pledge of Common Stock of Ohio Indemnity Company (the “Company”) |
To Whom It May Concern:
You are hereby notified that the undersigned has granted a security interest in and pledged all of
the shares of Common Stock owned by it on the books and records of the Company to Fifth Third Bank,
an Ohio banking corporation (the “Bank”) pursuant to the terms and conditions of that certain Stock
Pledge Agreement executed by the undersigned in favor of the Bank, dated as of October _____, 2010.
Please deem any instructions by the Bank which you receive regarding the exercise of any rights
with respect to the shares as if such instructions were made by the undersigned to you, until
further instruction from the Bank.
| Bancinsurance Corporation, an Ohio corporation |
||||
| By: | ||||
| Xxxxxxx X. Xxxxx, Vice President, | ||||
| Chief Financial Officer, Treasurer and Secretary | ||||
