STOCK PLEDGE AND SECURITY AGREEMENT
-----------------------------------
THIS STOCK PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made
and entered into as of the 21 day of April 2003, by Bankers Insurance Group,
Inc. (the "Pledgor"), in favor of Regions Bank (the "Lender").
WHEREAS, Lender and Pledgor are parties to that certain Credit
Agreement dated as of December 18, 1998 (as amended from time to time, the
"Credit Agreement"), pursuant to which Lender made a Term Loan to Pledgor in
the original principal amount of $17,800,000.00 (the "Loan"). The Loan is
evidenced by Pledgor's Term Note dated as of December 18, 1998 in the original
principal amount of $17,800,000.00 (the "Note"). Capitalized terms not
otherwise defined herein shall have the meanings given such terms in the
Credit Agreement; and
WHEREAS, Lender and Pledgor are parties to a Forbearance and Master
Loan Documents Modification Agreement dated as of September 18, 2000 as
amended and modified by letter agreement dated January 22, 2002 (the
"Forbearance Agreement"); and
WHEREAS, Lender has required, as a condition precedent to Lender's
extending the Forbearance Period provided in the Forbearance Agreement, that
Pledgor execute this Agreement in favor of Lender pledging certain securities
(as defined in Section 1 below, the "Collateral") as collateral security for
the prompt and complete payment and performance when due of the Pledgor's
obligations to Lender under the Credit Agreement and the Loan Documents
defined therein including, without limitation, the Note; and
WHEREAS, Pledgor has determined that the transactions contemplated by
the Credit Agreement are beneficial to Pledgor, and it is thus in the best
interest of Pledgor to enter into this Agreement; and
WHEREAS, Pledgor has entered into that certain Agreement to
Facilitate Merger dated April 9, 2003 among Fiserv, Inc. ("Fiserv"), Fiserv
Solutions, Inc., Fiserv Merger Sub, Inc., Pledgor, Bankers Insurance Company,
Bankers Security Insurance Company and Bonded Builders Service Corp. (the
"Agreement to Facilitate"), pursuant to which Pledgor has agreed, among other
things, to (i) vote its shares of Insurance Management Solutions Group, Inc.
("IMSG") common stock in favor of the approval and adoption of the Merger
Agreement (as defined in the Agreement to Facilitate) and the transactions
contemplated thereby, (ii) vote against any action that could reasonably be
expected to impede, interfere, delay, or discourage the Merger (as defined in
the Agreement to Facilitate), facilitate an acquisition of IMSG or all or
substantially all of its assets or business, in any manner, by a party (other
than Fiserv or a subsidiary of Fiserv), or result in any breach of
representation, warranty, covenant or agreement of IMSG under the Merger
Agreement, (iii) not dispose or otherwise sell any shares of IMSG common
stock, except to certain of its subsidiaries which are also parties to the
Agreement to Facilitate and (iv) accept $3.26 per share, in cash, without
interest, pursuant to the Merger; and
WHEREAS, Lender has agreed pursuant to that certain Letter Agreement
between Pledgor and Lender dated as of the date hereof that the security
interest in the Collateral granted by Pledgor in favor of Lender is subject to
the restrictions contained in the Letter Agreement, a copy of which is
attached hereto as Exhibit A;
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants and agreements herein set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
1. Representations of Pledgor. Pledgor represents and warrants
as follows:
(a) Pledgor is the legal and beneficial owner, free and
clear of any liens, charges or encumbrances, of stock certificate No. INMG
0153 representing 2,000,000 shares of common stock of IMSG registered in the
name of Pledgor (the "Collateral").
(b) The shares of stock constituting the Collateral
constitute issued and outstanding common stock of ISMG, and have been duly and
validly issued, are fully paid and non-assessable, and, except as set forth in
the Agreement to Facilitate Merger, there are no restrictions on the transfer
of any of the Collateral or on Pledgor's right to pledge the Collateral.
(c) This Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding obligation of
Pledgor, enforceable in accordance with its terms;
(d) The making and performance of this Agreement by Pledgor
(i) is not and will not be in violation of any law or any regulation
promulgated pursuant to law, by any governmental agency or body; (ii) does not
require the approval or consent of any governmental agency or body; (iii) will
not conflict with, or result in a breach of, any term, condition or provision
of, or constitute a default under, any instrument to which Pledgor is a party
or may be bound or affected, or constitute (with or without the giving of
notice or the passage of time or both) a default under any such instrument, or
result in the acceleration of any indebtedness, or result in the breach of any
regulation, order, writ, injunction or decree of any court or any commission,
board or other administrative agency entered in any proceeding to which
Pledgor is a party or by which it may be bound or affected; and (iv) does not
require the approval of any other secured or unsecured creditor.
(e) Upon consummation of the pledge and assignment of the
Collateral to Lender pursuant to this Agreement, such pledge and assignment
will create a valid lien on and, upon delivery of the Collateral to the
Lender, together with a stock transfer executed in blank, a perfected security
interest in the Collateral.
(f) No Collateral has been heretofore pledged to any person
or entity and all Collateral is free of all liens of any kind whatsoever,
except as set forth in the Agreement to Facilitate.
2. Pledge of Collateral. Pledgor hereby assigns, hypothecates,
transfers and pledges to Lender all of the Pledgor's right, title and interest
in and to all of the Collateral and hereby grants to Lender a lien on and a
security interest in such Collateral, all as collateral security for (a) the
prompt and complete payment when due of the indebtedness of Pledgor evidenced
by the Loan Documents including, without limitation, the Credit Agreement and
the Note; (b) the prompt and complete performance of the obligations of
Pledgor under, or pursuant to the terms of this Agreement; and (c) all costs
and expenses incurred by Lender in connection with the enforcement,
maintenance and preservations of its rights under any of the Loan Documents
and this Agreement, including all attorneys' fees and including all such costs
herein. Anything to the contrary in this Agreement notwithstanding, so long as
there is no default in existence under the Loan Documents, the Pledgor shall
be entitled (i) to receive or to direct payment and distribution of dividends
paid or interest earned on the Collateral and (ii) to vote, or to direct the
voting of such shares of IMSG common stock which, rights shall terminate upon
the occurrence of a default under any of such Loan Documents.
3. Redelivery of Collateral. Upon performance and satisfaction in
full of the Pledgor's obligations under the Loan Documents, this Agreement
shall immediately cease and terminate as herein provided, and any Collateral
then held by Lender shall be deemed immediately transferred to Pledgor, and
this Agreement shall thereupon have no further force or effect. Upon the
happening of the events specified in the immediately preceding sentence, the
Lender shall be deemed to be holding such Collateral in trust for Pledgor
until such Collateral, together with appropriate instruments of reassignment
and release as requested by Pledgor, are delivered to Pledgor or to Pledgor's
designee. Upon such delivery of Collateral or any part thereof to Pledgor or
to Pledgor's designee hereunder or otherwise, the receipt thereof by Pledgor
shall be a complete and full acquittance for the Collateral so delivered, and
Lender shall thereafter be discharged from any liability or responsibility
therefor. Anything to the contrary in this Section 3 notwithstanding, the
exercise of the parties' rights and responsibilities under this Section 3 are
subject to any applicable change of control regulations of the Florida
Department of Insurance and related laws of the State of Florida.
4. Default. Upon default under the Loan Documents, Lender shall give
Pledgor notice in writing of the default and shall afford Pledgor a sixty (60)
day period in which to cure or eliminate such default. Should Pledgor fail to
cure or eliminate such default, the Lender without further demand of
performance or other demand, advertisement, or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
Pledgor or any other person (all and each of which demands, advertisements
and/or notices are hereby expressly waived to the extent permitted by law),
may, subject to the terms of the Agreement to Facilitate Merger, collect,
receive, appropriate and realize upon the Collateral, or any portion thereof,
and/or may forthwith sell, assign, grant options to purchase, contract to sell
or otherwise dispose of and deliver the Collateral, or any part thereof, in
one or more units, at public or private sale or sales, at any exchange,
broker's board or at any of Lender's offices or elsewhere, upon such terms and
conditions as the Lender may deem advisable and at such prices as Lender may
deem reasonable, for cash or on credit or for future delivery without
assumption of any credit risk, with the right to Lender upon any such sale or
sales, public or private, to purchase the whole or any portion of the
Collateral so sold, free of any right or equity of redemption in Pledgor,
which right or equity is hereby expressly waived and released to the extent
permitted by law. Unless the Collateral threatens to decline speedily in value
or is of a type customarily sold on a recognized market (in which event no
notification is required), the Lender shall give at least five (5) days'
notice of the time and place of any public sale or of the time after which a
private sale or other intended disposition is to take place and that such
notice is reasonable notification of such matters. Such notice shall be given
in the manner prescribed in the Florida Uniform Commercial Code for giving of
notice by secured parties to debtors. Such reasonable notification shall be
given to Pledgor unless it 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 the Loan,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code of the State of Florida. Anything to the contrary in
this Section 4 notwithstanding, the exercise of Lender's rights under this
Section 4 are subject to any applicable change of control regulations of the
Florida Department of Insurance and related laws of the State of Florida.
5. Rights of Lender. Except as set forth in the Letter Agreement,
upon (a) the failure by Pledgor to pay when due the obligations evidenced by
the Loan Documents and secured by this Agreement, in accordance with the
respective terms thereof, and (b) Lender's consummation of a sale of or other
realization upon Collateral in accordance with this Agreement, the Collateral
so sold or realized upon may be registered in the name of the purchaser or
Lender, as the case may be, and thereafter, Pledgor and any individual having
rights that arise through Pledgor, subject to any applicable change of control
regulations of the Florida Department of Insurance and related laws of the
State of Florida, shall not be entitled to exercise any voting and corporate
rights with respect to such Collateral or exercise any rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining
to any of such Collateral.
6. Distribution of Proceeds. The proceeds of any sale of all of any
part of the Collateral may be applied by Lender, at its option, to any of the
following:
(a) First, to the payment of all of the costs and expenses
of sale of the Collateral, including, without limitation, reasonable fees and
expenses of the Lender and its agents, attorneys and counsel; and, all other
expenses, liabilities and advances made or incurred by Lender in connection
herewith or with respect to the Loan Documents or this Agreement;
(b) Second, to the payment in full of the interest on and
principal due under the Loan Documents (whether or not the same shall have
been declared forthwith due and payable) and all other indebtedness secured by
the pledge hereunder, or, if not sufficient to pay all such amounts in full,
then to payment of accrued but unpaid interest, and then unpaid principal due
under the Agreement until the Pledgor's obligations under the Agreement are
paid in full, and next, if any amounts remain, to any other indebtedness or
obligation secured by the pledge hereunder in such order as Lender may elect;
and
(c) Third, after all payments described in Subparagraphs (a)
and (b) of this section shall have been made in full, any surplus remaining
from such proceeds shall be paid to Pledgor or whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may
direct.
7. Presentments. Lender shall be under no duty or obligation
whatsoever, other than as set forth in this Agreement and the Loan Documents,
to make or give any presentments, demands for performances, notices of
nonperformance, protests, notice of protest or notice of dishonor in
connection with the obligations evidenced by the Loan Documents or the whole
or any part of the obligations secured hereunder.
8. No Waiver. No delay on the part of Lender in exercising any right,
power or privilege under this Agreement or failure to exercise the same shall
operate as a waiver of or otherwise affect any such right, power or privilege,
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. No
notice to or demand on the Pledgor shall be deemed to be a waiver of any of
the obligations of the Pledgor or of the right of Lender to take further
action or to exercise any rights hereunder without notice or demand or
prejudice the rights of Lender in any respect; nor in any event shall any
alternative, amendment, modification or waiver of the provisions of this
Agreement be effective unless in writing by the party to be charged thereby,
nor shall any such waiver be applicable except in the specific instance for
which given.
9. No Disposition. Except as provided in the Agreement to Facilitate,
without the prior written consent of Lender, Pledgor agrees that it will not
sell, assign, transfer, exchange or otherwise dispose of, or grant any option
with respect to the Collateral, nor will it create, incur or permit to exist
any Lien on any of the Collateral, or any interest thereon, or any proceeds
thereof, except for the Liens thereon in favor of Lender. Without the prior
written consent of Lender, Pledgor agrees that it will not take any action
that would compromise Lender's rights under this Agreement.
10. Other Rights. The rights, powers and remedies given to Lender by
this Agreement shall be in addition to all rights, powers and remedies given
to Lender by virtue of any statute or rule of law. Every right, power and
remedy of Lender shall continue in full force and effect until either (a)
termination of this Agreement or (b) such right, power or remedy is
specifically waived by an instrument in writing executed by Lender.
11. Further Assurances. Pledgor hereby agrees to execute and deliver,
from time to time, any and all further, or other, instruments, and to perform
such acts, as Lender may reasonably request to effect the purposes of this
Agreement and to secure to Lender and to all persons who may from time to time
be holders of any of the Collateral hereunder the benefits of all rights,
authorities and remedies conferred upon Lender by the terms of this Agreement.
12. Binding Effect. This Agreement shall be binding upon the parties
hereto and their respective heirs, legal representatives, successors and
assigns.
13. Notices. All notices, demands and communications given or made
hereunder or pursuant hereto shall be in writing and shall be given as
provided in the Credit Agreement or to such other address or to such other
person as any party shall designate to the others for such purpose in the
manner hereinabove set forth.
14. Specific Performance. The parties hereto agree that the remedies
at law for damages under this Agreement in the event of any actual or
threatened breach or default hereunder are not and will not be adequate, and
that the obligations may therefor be specifically enforced.
15. Gender; Defined Terms. Whenever in this Agreement the context so
requires, the singular shall include the plural and the plural the singular.
It is also understood that designations of parties hereto in a particular
gender shall be read to include other genders as applicable. All capitalized
terms not otherwise defined in this Agreement shall have the meanings given
them in the Credit Agreement as the context may require.
16. Severability. If any provision of this Agreement is determined by
a court to be invalid or unenforceable, such determination shall not affect
any other provision, each of which shall be construed and enforced as if such
invalid or unenforceable portion were not contained herein. Such invalidity or
unenforceability shall not affect any valid and enforceable application
thereof, and each such provision shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the full extent permitted by
law.
17. Amendments; Governing Law. This Agreement may not be amended or
supplemented except by an instrument in writing executed by Lender and the
Pledgor. The validity and interpretation of this Agreement and performance of
the parties hereto of their respective duties and obligations hereunder shall
be governed by the laws of the State of Florida.
19. Jurisdiction and Venue. The Pledgor agrees that by executing and
delivering this Agreement to the Lender the Pledgor submits to personal
jurisdiction in any court of competent jurisdiction in Hillsborough or
Pinellas County, Florida, agrees that service of process may be had on the
Pledgor by service upon the Secretary of State of the State of Florida with a
copy sent by certified mail to Pledgor at its address for notices set forth in
this Agreement, and that venue of any action arising under or relating to this
Agreement shall lie exclusively in Pinellas County, Florida.
20. Waiver of Right to Jury Trial. The Pledgor, for itself, its
successors and assigns, hereby waives its right to trial by jury in any
action, whether in contract or tort, arising under or in any way related to
this Agreement or to the Loan Documents.
21. Assignment. Pledgor acknowledges and agrees that Lender shall
have the right to assign this Agreement and all of Lender's rights hereunder.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first written above.
Witnesses: BANKERS INSURANCE GROUP, INC.
/s/ Xxx X. Xxxx By:/s/ Xxxxx X. Xxxxxxxxx
-------------------------- ---------------------------------
Print name: Xxx X. Xxxx Name: Xxxxx X. Xxxxxxxxx
Title: Treasurer
/s/ Xxxxx X. Xxxxx
--------------------------
Print name: Xxxxx X. Xxxxx
STATE OF FLORIDA
COUNTY OF PINELLAS
The foregoing instrument was acknowledged before me this 21 day of
April, 2003, by Xxxxx X. Xxxxxxxxx, who is personally known to me or who
produced a Florida driver's license as identification, as Treasurer of Bankers
Insurance Group, Inc., on behalf of said corporation.
/s/ Xxxxx X. Xxxxx
------------------------------------
Print Name: Xxxxx X. Xxxxx
Notary Public, State of Florida
My Commission Number is: #DD 168156
My Commission Expires: March 25, 2007
[Notary Seal]
