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EXHIBIT (10)(l)
PLEDGE AGREEMENT
In consideration of financial accommodations extended to PROFESSIONALS
INSURANCE COMPANY MANAGEMENT GROUP whose address is 0000 Xxxxxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000 (the "undersigned"), by PICOM Insurance Company, a
Michigan stock insurance company, whose address is 0000 Xxxxxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000 ("Creditor"), and to secure payment and performance of
any and all indebtedness and liabilities of the undersigned (and any successor
in interest, including without limit any debtor in possession or trustee in
bankruptcy for the undersigned) to Creditor, due or to become due, whether now
existing or later arising, and however evidenced, whether direct or indirect,
absolute or contingent, and whether joint, several or joint and several,
including without limit obligations under any promissory note, guaranty, letter
of credit application, indemnity and any post bankruptcy petition interest and
attorneys' fees (the "Indebtedness"), the undersigned hereby assigns, transfers,
delivers and pledges to Creditor the following securities, stocks, bonds, notes,
instruments, documents of title, or other property listed on the attached Annex
A.
The undersigned grants Creditor a security interest in all of the above
property, and all other property of the undersigned coming into Creditor's
possession in any manner whatsoever, including, without limitation, all property
substituted therefor or for any part thereof, all records (including computer
software) pertaining thereto and all interest, dividends, increase, profits, new
securities or other increments, distributions or rights of any kind received on
account of this property, products or proceeds thereof (whether cash or non-cash
proceeds) resulting from any sale or exchange or transfer thereof or arising by
virtue of ownership thereof (such as, but not limited to, the rights to
additional or other securities or property upon any corporate reorganization,
merger, consolidation, liquidation or dissolution, offering of stock rights,
stock split or stock or liquidating dividend or the rights to any goods
evidenced by such property or insurance proceeds with respect thereto), and all
subscription, voting and preferential rights, all said property, products and
proceeds herein called the "Collateral." The creation of a security interest in
proceeds is not to be construed to give the undersigned any right to dispose of
the Collateral. The undersigned warrant(s) that the undersigned has clear title
to the Collateral, free from any liens, claims or encumbrances except the
security interest created by this Agreement, and has full power and authority to
execute and perform this Agreement.
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Except as otherwise provided herein, all other terms used in this Agreement
shall have the meanings given under Article 9 of the Michigan Uniform Commercial
Code, or in any other article, if not defined in Article 9. Michigan Uniform
Commercial Code shall mean Act 174 of the Michigan Public Acts of 1962, as
amended from time to time.
The undersigned agrees to keep the Collateral free at all times from any and all
claims, liens, security interests, and encumbrances other than those in favor of
Creditor.
Creditor agrees to use reasonable care in the custody and preservation of
Collateral in its possession but assumes no duty to take steps necessary to
preserve rights against prior parties.
At any time and without notice, Creditor may (a) cause the Collateral or any
portion of it to be transferred to its name or to the name of its nominee or
nominees; (b) receive or collect by legal proceedings or otherwise all
dividends, interest, principal payments and other sums and all other
distributions at any time payable or receivable on account of the Collateral,
and hold the same as Collateral, or apply the same to the Indebtedness, the
manner and distribution of the application to be in the sole discretion of
Creditor; (c) enter into any extension, subordination, reorganization, deposit,
merger or consolidation agreement or any other agreement relating to or
affecting the Collateral, and deposit or surrender control of the Collateral,
and accept other property in exchange for the Collateral and hold or apply the
property or money so received in accordance with the provisions of this
Agreement.
If the undersigned defaults in the payment of any of the Indebtedness or in the
performance of any of its other obligations to Creditor, or if a default, event
of default, or breach occurs under any of the documents or agreements
evidencing, securing or relating to the Indebtedness, then Creditor may enforce
its security interest in the Collateral by retaining the Collateral in
satisfaction of the Indebtedness, by public or private sale of all or any part
of the Collateral or by exercising any other remedy provided by law or
applicable agreement. The parties agree that five days written notice sent by
ordinary mail to the undersigned at the address designated below shall be deemed
reasonable notice of any disposition of the Collateral, should notice be
required by law.
Creditor may assign any of the Indebtedness and deliver all or any part of the
Collateral to its assignee, who then shall have with respect to the Collateral
so delivered all the rights and powers of Creditor under this Agreement and
after that Creditor shall be fully discharged from all liability and
responsibility with respect to the Collateral so delivered.
If Creditor, acting in its sole discretion, redelivers Collateral to the
undersigned or the undersigned's designee for the purpose of
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(a) the ultimate sale or exchange thereof, or
(b) presentation, collection, renewal, or registration of transfer
thereof, or
(c) loading, unloading, storing, shipping, transshipping, manufacturing,
processing or otherwise dealing therewith preliminary to sale or
exchange,
such redelivery shall be in trust for the benefit of Creditor and shall not
constitute a release of Creditor's security interest therein or in the proceeds
or products thereof unless Creditor specifically so agrees in writing. If the
undersigned requests any such redelivery, the undersigned will deliver with such
request a duly executed financing statement in form and substance satisfactory
to Creditor. Any proceeds of Collateral coming into the undersigned's possession
as a result of any such redelivery shall be held in trust for Creditor and
forthwith delivered to Creditor for application on the Indebtedness. Creditor
may (if, in its sole discretion, it elects to do so) deliver the Collateral or
any part of the Collateral to the undersigned, and such delivery by Creditor
shall discharge Creditor from any and all liability or responsibility for such
Collateral.
The undersigned waives notice of acceptance of this Agreement and presentment,
demand, protest, notice of protest, dishonor, notice of dishonor, notice of
demand, notice of intent to demand, notice of acceleration, notice of intent to
accelerate, notice of default and diligence in collecting any Indebtedness, and
agrees that Creditor may modify the terms of borrowing, compromise, extend,
increase, accelerate, renew or forbear to enforce payment of any part or all of
any Indebtedness, or permit the undersigned to incur additional Indebtedness,
all without notice to the undersigned and without affecting in any manner
Creditor's rights under this Agreement. The undersigned further waives any and
all other notices to which the undersigned might otherwise be entitled. The
undersigned acknowledges and agrees that Creditor's rights under this Agreement
are not conditioned upon pursuit by Creditor of any remedy Creditor may have
against the undersigned or any other person or any other security. No
invalidity, irregularity or unenforceability of any part or all of the
Indebtedness or any documents evidencing the same, by reason of any bankruptcy,
insolvency or other law or order of any kind or for any other reasons, and no
defense or setoff available at any time to the undersigned, shall impair, affect
or be a defense or setoff to Creditor's rights under this Agreement.
The undersigned acknowledges that the effectiveness of this Agreement is not
conditioned on any or all of the Indebtedness being guaranteed by anyone else.
Creditor, in its sole discretion, without notice to the undersigned, may
release, exchange, enforce and otherwise deal with any security now or later
held by Creditor for payment of the Indebtedness without affecting in any manner
Creditor's rights under this Agreement. The undersigned
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acknowledges and agrees that Creditor has no obligation to acquire or perfect
any lien on or security interest in any assets, whether realty or personalty, to
secure payment of the Indebtedness, and the undersigned is not relying upon
assets in which Creditor has or may have a lien or security interest for payment
of the Indebtedness.
Until the Indebtedness is irrevocably paid in full, the undersigned waives any
and all rights to be subrogated to the position of Creditor or to have the
benefit of any lien, security interest or other guaranty now or later held by
Creditor for the Indebtedness or to enforce any remedy which Creditor now has or
later may have against the undersigned or any other person. Until the
Indebtedness is irrevocably paid in full, the undersigned shall have no right of
reimbursement, indemnity, contribution or other right or recourse to or with
respect to the undersigned or any other person. The undersigned agrees to
indemnify and hold harmless Creditor from and against any and all claims,
actions, damages, costs and expenses, including without limit reasonable
attorneys' fees, incurred by Creditor in connection with this Agreement.
Notwithstanding any prior revocation, termination, surrender, or discharge of
this Agreement in whole or part, the effectiveness of this Agreement shall
automatically continue or be reinstated, as the case may be, in the event that
any payment received or credit given by Creditor in respect of the Indebtedness
is returned, disgorged, or rescinded as a preference, impermissible setoff,
fraudulent conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation, laws pertaining
to bankruptcy or insolvency, in which case this Agreement shall be enforceable
against the undersigned as if the returned, disgorged, or rescinded payment or
credit had not been received or given by Creditor, and whether or not Creditor
relied upon this payment or credit or changed its position as a consequence of
it.
The undersigned shall take or cause to be taken and execute or cause to be
executed all financing statements, endorsements, assignments and other writings
requested by Creditor to establish, maintain, reinstate, and/or continue the
perfected and first priority status of the security interest of Creditor in the
Collateral or implement or further effectuate the terms or purpose of this
Agreement, although the failure of the undersigned to do so shall not affect in
any way Creditor's perfected and first priority security interest in the
Collateral, and will on demand pay all costs and expenses of filing and
recording, including the costs of any record searches, deemed necessary by
Creditor from time to time, to establish or determine the validity and the
priority of Creditor's security interest. The undersigned further makes,
constitutes and appoints Creditor its true and lawful attorney-in-fact with full
power of substitution to take any action in furtherance of this Agreement,
including, without limitation, the signing of financing statements, endorsing of
instruments, and the execution and delivery of all documents and agreements
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g
necessary to obtain or accomplish any protection for or collection or
disposition of any part of the Collateral. Such appointment shall be deemed
irrevocable and coupled with an interest.
The undersigned waives any right to require Creditor to: (a) proceed against any
person, (b) proceed against or exhaust any security held by Creditor; (c) give
notice of the terms, time and place of any public or private sale of personal
property security held from the undersigned or any other person, or comply with
the provisions of Section 9-504 of the Michigan or other applicable Uniform
Commercial Code; (d) pursue any other remedy in Creditor's power; or (e) make
any presentments or demands for performance, or give any notices of
nonperformance, protests, notices of protest or notices of dishonor in
connection with any obligations or evidences of Indebtedness held by Creditor as
security, in connection with any other obligations or evidences of Indebtedness
which continues in whole or in part of the Indebtedness secured under this
Agreement, or in connection with the creation of new or additional Indebtedness.
The undersigned waives any defense based upon or arising by reason of (a) any
disability or other defense of any other person; (b) the cessation or limitation
from any cause, other than final and irrevocable payment in full, of the
Indebtedness; (c) any lack of authority of any officer, director, partner, agent
or any other person acting or purporting to act on behalf of the undersigned or
any defect in the formation of the undersigned; (d) the application by the
undersigned of the proceeds of any Indebtedness for purposes other than the
purposes represented by the undersigned to Creditor or intended or understood by
the undersigned; (e) any act or omission by Creditor which directly or
indirectly results in or aids the discharge of the undersigned or any
Indebtedness by operation of law or otherwise; or (f) any modification of the
Indebtedness, in any form, including without limit the renewal, extension,
acceleration or other change in time for payment of the Indebtedness, or other
change in the terms of Indebtedness or any part of it, including without limit
increase or decrease of the rate of interest.
The undersigned acknowledges that Creditor has the right to sell, assign,
transfer, negotiate or grant participations or any interest in, any or all of
the Indebtedness and any related obligations, including without limit this
Agreement. In connection with the above, but without limiting its ability to
make other disclosures to the full extent allowable, Creditor may disclose all
documents and information which Creditor now has or later acquires relating to
the undersigned, the Indebtedness or this Agreement, however obtained.
This Agreement constitutes the entire agreement of the undersigned and Creditor
with respect to the subject matter of this Agreement. No waiver, consent,
modification, or change of the terms of this Agreement shall bind the
undersigned or Creditor unless in writing and signed by the waiving party or an
authorized officer of the
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waiving party, and then this waiver, consent, modification, or change shall be
effective only in the specific instance and for the specific purpose given. This
Agreement shall inure to the benefit of Creditor and its successors and assigns.
This Agreement shall be binding on the undersigned and its successors and
assigns, including without limitation any debtor in possession or trustee in
bankruptcy for the undersigned. The undersigned has entered into this Agreement
in good faith for the purpose of inducing Creditor to extend credit to make
other financial accommodations to the undersigned, and the undersigned
acknowledges that the terms of this Agreement are reasonable. If any provision
of this Agreement is unenforceable in whole or in part for any reason, the
remaining provisions shall continue to be effective. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.
The undersigned agrees to reimburse Creditor for any and all costs and expenses
(including without limit court costs, legal fees, and reasonable attorney fees
whether inside or outside counsel is used, whether or not suit is instituted
and, if instituted, whether at the trial court level, appellate level, in a
bankruptcy, probate or administrative proceeding or otherwise and audit
expenses) incurred in enforcing any of the duties and obligations of the
undersigned or rights of Creditor under this Agreement.
The undersigned's chief executive office is located at the address specified
below. The undersigned will give Creditor not less than 90 days prior written
notice of all contemplated changes in undersigned's name, legal structure, chief
executive office, or in the location of the Collateral or the undersigned's
records concerning same and, prior to making any such changes, file or cause to
be filed all financing statements or amendments necessary or appropriate to
establish and maintain a valid first priority security interest in all the
Collateral for Creditor.
Any notice from Creditor to the undersigned, if mailed, shall be deemed given
when mailed, postage paid, addressed to the undersigned either at the
undersigned's chief executive office as shown below, or at any other address of
the undersigned appearing on the records of Creditor.
THE UNDERSIGNED AND CREDITOR ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE
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EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY
RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.
Dated and delivered on February 12, 1998 at 0000 Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxx.
PROFESSIONALS INSURANCE COMPANY
MANAGEMENT GROUP,
Pledgor
VOID
By:___________________________
Xxxxxx X. Xxxxx
Its: President and Chief
Address: Executive Officer
VOID
0000 Xxxxxxxxxxxxx Xxxxx By:___________________________
Okemos, Michigan 48864 Xxxxxxx X. Xxxxx
Its: Secretary
County: Xxxxxx
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ANNEX A
5,000,000 shares of capital stock of PPTF Merger Insurance Company, a
Florida stock insurance corporation, as evidenced by stock certificate no. 01.
