Exhibit 10.6
COLLATERAL ASSIGNMENT OF FLOOD BOOK
THIS COLLATERAL ASSIGNMENT OF FLOOD BOOK (herein, "Assignment") is made
effective this 15 day of August, 2002 by BANKERS UNDERWRITERS, INC., A FLORIDA
CORPORATION (herein, "Pledgor"), in favor of INSURANCE MANAGEMENT SOLUTIONS
GROUP, INC., A FLORIDA CORPORATION (herein, "Lender").
RECITALS:
WHEREAS, Lender has its principal place of business located in St. Petersburg,
Florida, and has established a revolving line of credit (collectively, with the
Note and Loan Documents, as defined herein, the "Credit Line") in favor of
Bankers Insurance Group, Inc., a Florida corporation (herein, "BIG") and
Pledgor (BIG and Pledgor herein, collectively, "Borrower"), in the amount of
seven million and no/100 dollar ($7,000,000.00), as evidenced by Borrower's
Revolving Line of Credit Master Promissory Note (herein, "Note") of even date
herewith and in like principal amount; and
WHEREAS, Pledgor, Bankers Insurance Company, a Florida corporation (herein,
"BIC"), and First Community Insurance Company, a Florida corporation (herein,
"FCIC") are each wholly-owned subsidiaries of BIG; and
WHEREAS, in connection with the establishment of the Credit Line, Borrower has
executed and delivered various applicable documents, all dated of even date
herewith (collectively together with this Assignment, the "Loan Documents")
including, but not limited to, the Note, Credit and Security Agreement, UCC-1
Financing Statement, and Further Assurances Agreement; and
WHEREAS, Pledgor, as a Florida general insurance agent serving both BIC and
FCIC, is the owner of a significant flood book of business (inclusive of all
agency agreements pertaining thereto herein, "Flood Book") consisting of in
excess of 350,000 flood insurance policies on properties located in various
states of the United States, which Flood Book is more particularly described on
Exhibit "A" attached hereto; and
WHEREAS, as a condition precedent to establishing the Credit Line, Lender has
required the execution of this Assignment;
NOW, THEREFORE, in consideration of the aforesaid Credit Line, as well as for
other good and valuable consideration, Pledgor hereby assigns the Flood Book to
Lender as collateral security for the repayment of all sums advanced on the
Credit Line and for the performance by Borrower of all covenants and agreements
under the Loan Documents, in accordance with the following terms and conditions:
SECTION 1. RECITALS.
The statements contained in the recitals of fact set forth above
(herein, "Recitals") are true and correct, and the Recitals by this
reference are made a part of this Assignment.
SECTION 2. EXHIBITS.
The exhibits attached to this Assignment are by this reference made a
part of this Assignment.
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SECTION 3. TERM OF ASSIGNMENT.
a) This Assignment shall be effective upon the date set forth hereinabove.
b) This Assignment shall continue in full force and effect until Borrower
shall have satisfied in full all of its obligations to Lender under the
Note and other Loan Documents.
SECTION 4. POWER OF ATTORNEY.
a) Appointment.
1) Until such time as the Credit Line has been paid in full or upon
consent by Lender otherwise, and except as provided below, Pledgor
irrevocably nominates, constitutes and appoints Lender its true and
lawful attorney in fact, with full power of substitution and
revocation for it, in its name, place and stead and either in the
name of Lender or in the name of Pledgor to assign any agency
agreements between Pledgor and agents responsible for the
production of federal flood insurance policies as well as any other
instruments, agreements, or certificates necessary or appropriate
to give full force an effect to such assignment which assignment
may be to Lender, to BIC, to FCIC, or to such other party as Lender
may select, but Lender shall not be under any duty to exercise any
such authority or power or in any way be responsible for the
collection of any sums owing under the Flood Book (herein, "Power
of Attorney").
2) All rights, powers, and authority of said attorney-in-fact to
exercise any and all rights and powers herein granted shall
commence and be in full force and effect as of the date of this
Assignment and such rights, powers, and authority shall remain in
full force and effect thereafter until the termination of this
Assignment.
b) Limitation. Notwithstanding the foregoing or anything contained in this
Assignment to the contrary, Lender shall not exercise its rights under
this Power of Attorney or under this Agreement until an Event of Default
(as defined below) occurs hereunder.
c) Power. The Power of Attorney set forth herein is a power coupled with an
interest.
SECTION 5. AFFIRMATIVE COVENANTS
Pledgor hereby covenants with Lender that:
(i) for so long as any amount remains outstanding under the
Credit Line; and
(ii) unless Lender notifies Pledgor in writing it dispenses with
any one (1) or more of the requirements contained in the
Loan Documents,
Pledgor shall keep the Flood Book free from any and all liens,
encumbrances, and security interests, and shall pay and discharge when due
all taxes, levies, and other charges upon them and defend them against all
claims of any person.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
a) Pledgor hereby represents and warrants to Lender that:
1) it is the lawful owner and holder of the entire interest in the
Flood Book described above;
2) it has good right to sell, transfer and assign the same as
aforesaid;
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3) there are no actions, suits, or proceedings pending or, to the best of
Pledgor's knowledge and belief, threatened against or affecting it whether
civil, criminal, administrative, or investigative, and it is not in
default with respect to any judgment, decision, order, writ, injunction,
decree, or demand of any court or governmental authority;
4) the consummation of the transactions hereby contemplated in performance of
this Assignment or of any of the Loan Documents will not result in any
breach of, or constitute a default under any mortgage, deed of trust,
lien, bank loan or credit agreement, corporate charter or by-law, or other
instrument to which Pledgor is a party, or by which it is bound or
affected;
5) it is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida;
6) it has the lawful power to own its properties and to engage in the
business it conducts;
7) it is duly qualified and in good standing as a foreign corporation in the
jurisdictions wherein the nature of the business transacted by it or
property owned by it make such qualification necessary;
8) the execution of this Assignment and the consummation of the transactions
contemplated herein, and the performance of this Assignment and the Loan
Documents, will not result in a breach or violation of any law,
regulation, ordinance, order, judgment or decree applicable to Pledgor or
any affiliate of Pledgor;
9) as of the date hereof, and subject to the ordinary course of Pledgor's
business, Pledgor has no knowledge of circumstances or events that will
cause or is likely to cause any material adverse decline in the number of
flood insurance policies which constitute the Flood Book, or any material
adverse decline in the value of the Flood Book;
10) no affiliate of BIG owns or conducts any flood book of business, except
for a nominal portion of flood book business written by Bankers Security
Insurance Company and First Community Insurance Company; and
11) by means of this Assignment, Pledgor had granted Lender a first priority
security interest in the Pledgor's entire interest in the Flood Book.
b) All of the representations and warranties set forth in this Section 6 shall
survive until all sums due under the Credit Line are satisfied in full.
SECTION 7. EVENTS OF DEFAULT
a) The term "Event of Default" shall mean:
1) Any breach by Pledgor of any of the terms of this Assignment; or
2) The breach or the occurrence of any event of default by Borrower, or any
affiliate of Borrower, under any of the Loan Documents.
SECTION 8. MISCELLANEOUS
a) Further Assurances. From time to time, Pledgor will execute and deliver to
Lender such additional documents and will provide such additional
information as Lender may reasonably require to carry out the terms of this
Assignment and be informed of Pledgor's status and affairs.
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b) Payment. The Pledgor agrees that as long as the Note is in full force and
effect, it will make all payments, when due, by check duly mailed or
delivered to Lender at the address indicated in the Notice section of this
Assignment, or at such other place as Lender may designate to the Pledgor in
writing, notwithstanding any contrary provisions herein or in Note with
respect to the place of payment.
c) Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by the Pledgor in connection
herewith shall survive the execution and delivery of this Assignment and of
the Note.
d) Successors and Assigns. Pledgor may not assign its rights or obligations
hereunder without the prior written consent of Lender, except that Pledgor
may assign all or a portion of its rights and obligations hereunder to BIG,
but only in conjunction with an assignment to BIG of a corresponding portion
of Pledgor's interest in the Flood Book in such a manner that Lender shall
maintain its first priority security interest in the entirety of the Flood
Book whether then owned by BUI or BIG (provided, however, that BUI shall
first serve notice of its intent to make such an assignment to BIG and shall
not effect such assignment until Lender shall have completed such acts as
Lender shall believe reasonably necessary to maintain its first priority
security interest in the entirety of the Flood Book). All covenants and
agreements in this Assignment contained by or on behalf of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not.
e) Waiver by Lender. Lender shall have the right at all times to enforce the
provisions of this Assignment and any other Loan Documents executed pursuant
hereto in strict accordance with the terms hereof and thereof,
notwithstanding any conduct or custom on the part of Lender in refraining
from so doing at any time or times. The failure of Lender at any time or
times to enforce its rights under such provisions, strictly in accordance
with the same, shall not be construed as having created a custom in any way
or manner contrary to specific provisions of this Assignment or as having in
any way or manner modified or waived the same. All rights and remedies of
Lender are cumulative and concurrent and the exercise of one right or remedy
shall not be deemed a waiver or release of any other right or remedy.
f) Inspect Records. Lender (or any person or persons designated by it) shall,
in its sole discretion, have the right to call at any place of business of
Pledgor at any reasonable time, and without hindrance or delay, inspect,
audit, check and make extracts from Pledgor's books, records, journals,
orders, receipts and any correspondence and other data relating to
Collateral, to Pledgor's business or any other transactions between the
Parties hereto.
g) Costs/Expenses. All reasonable costs and expenses of the Credit Line shall
be paid by Pledgor, including but not limited to, out-of-pocket expenses for
payment of recording and filing fees, legal fees and expenses of counsel
appointed by the Lender, together with any interest and penalties for the
late payment thereof, all of which amounts shall be payable at the time of
the execution of this Assignment or upon demand in the event they are
hereafter incurred.
h) Attorney's Fees. If either of the parties hereto should bring a Court action
alleging breach of this Assignment or seeking to enforce, rescind, renounce,
declare void or terminate this Assignment or any provisions thereof, the
prevailing party shall be entitled to recover all of its legal expenses,
including reasonable attorney's fees and costs (including legal expenses for
any appeals taken),
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and to have the same awarded as part of the judgment in the proceeding
in which such legal expenses and attorney's fees were incurred.
i) INTENTIONALLY DELETED.
j) Captions. The paragraph contains captions as to contents of the
particular paragraphs herein are inserted only for convenience and are
in no way to be construed as part of this Assignment or as a limitation
of the scope of the particular paragraph in which they are referred.
k) Construction of Assignment. Words of a gender used in this Assignment
shall be held to include any other gender, the words in a singular
number held to include the plural, when the sentence so requires.
l) Counterparts. This Assignment may be executed in several counterparts,
each of which so executed shall be deemed to be an original, and said
counterparts shall together constitute and be one and the same
instrument.
m) Entire Assignment. This Assignment contains all of the oral and/or
previously written agreements, representations, and arrangements
between the parties hereto, and all right which the respective Parties
may have had under any written agreements and/or oral agreements are
hereby canceled and terminated, and all parties agree that there are no
representations or warranties other than those set forth herein.
n) Invalidation. Should any part of this Assignment for any reason be
declared invalid, such decision shall not effect the validity of any
remaining portion, which remaining portion shall remain in full force
and effect as if this Assignment had been executed with the invalid
portion thereof eliminated. It is, therefore, declared the intention of
the parties hereto that each of them will have executed the remaining
portion of this Assignment without including therein any such part,
parts or portion which may, for any reason, be hereafter declared void.
o) Modification. No change or modification of this Assignment shall be
valid unless the same shall be in writing and signed by all of the
Parties hereto.
p) Notices. Any and all notices, designations, consents, offers,
acceptances, or any other communication provided for herein shall be
given in writing by hand delivery, by overnight carrier, by registered
or certified mail or by facsimile transmission and shall be addressed
as follows:
As to Pledgor: Bankers Underwriters, Inc.
360 Central Avenue, 17th Floor
St. Petersburg, Florida 33701
Att: David B. Snyder
Telephone: (727) 823-4000
Telefax: (727) 823-6518
As to Lender: Insurance Management Solutions Group, Inc.
360 Central Avenue, 16th Floor
St. Petersburg, Florida 33701
Att: David Howard, President
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Tel#: (727) 803-2040
Fax: (727) 803-4093
Notices sent by hand delivery shall be deemed effective on the date of
hand delivery. Notices being sent by overnight carrier shall be deemed
effective on the next business day after being placed into the hands
of the overnight carrier. Notices sent by registered or certified mail
shall be deemed effective on the third business day after being
deposited into the post office. Notices sent by facsimile transmission
shall be deemed to be effective on day when sent if sent prior to 5:00
p.m. (the time being determined by the time zone of the recipient)
otherwise they shall be deemed effective on the next business day.
q) Representation Acknowledged. The parties acknowledge that each party
and its counsel have reviewed and revised this Assignment and that the
normal rules of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the
interpretation of this Assignment or any amendments or exhibits
hereto.
r) Applicable Law/Venue. This Assignment shall be construed in
accordance with and governed by the laws of the State of Florida,
without regard to choice of law provisions. Further, the venue for any
action brought to enforce any of the provisions hereof shall be in a
state court of competent jurisdiction in Pinellas County, Florida and
any action commenced in any other forum may be removed to a state
court of competent jurisdiction in Pinellas County, Florida.
IN WITNESS WHEREOF, the Parties hereto have set their hands and seals, the day
and year first above written.
"Pledgor"
BANKERS UNDERWRITERS, INC.,
a Florida corporation
By: /s/ David B. Snyder
-----------------------
Its Vice President
Assistant Secretary
(CORPORATE SEAL)
"Lender"
INSURANCE MANAGEMENT SOLUTIONS
GROUP, INC. a Florida corporation
By: /s/ D. M. Howard
-----------------------
Its President/CEO
(CORPORATE SEAL)
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EXHIBIT "A"
DESCRIPTION OF COLLATERAL
All of Pledgor's right, title and interest in and to all of the following
described Collateral, wherever located, and whether now owned or hereafter
acquired, together with all replacements therefor and proceeds (including but
without limitation, insurance policies) thereof:
DESCRIPTION
OF
PLEDGOR COLLATERAL
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Bankers Underwriters, Inc., a All accounts and contract rights (as those
Florida corporation terms are defined by the Uniform Commercial
Code as adopted by the State of Florida)
with insurance agents, including but not
limited to general agency agreements with
respect to the sale of federal flood
insurance.
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