Document:

Exhibit 10.23

 

PROASSURANCE, INC. AND SUBSIDIARIES

CONSOLIDATED TAX ALLOCATION AGREEMENT

 

This agreement (“Agreement”),

dated June 27, 2001, is by and between ProAssurance, Inc. (“Parent” or

“ProAssurance”) and its subsidiaries, each of which has caused this agreement

to be executed by a duly authorized officer. 

This Agreement succeeds the Consolidated Tax Allocation Agreement, dated

December 30, 2000, by and between Medical Assurance, Inc. (“MAI”) and its

subsidiaries and the Tax Allocation Agreement, dated September 15, 2000, by and

between Professionals Group, Inc. (“PGI”) and its subsidiaries.  A list of ProAssurance’s subsidiaries and

their effective participation dates as they pertain to this Agreement is attached

as Exhibit A.

 

RECITALS:

 

Each of the corporations listed on Exhibit A (collectively, the

“Group”) is an affiliated corporation permitted to file a consolidated federal

income tax return, as a member of the group (“Member”), under the terms of

Section 1501, et seq., of the Internal Revenue Code of 1986, as amended

(“IRC”), and the Treasury Regulations (“Regulation(s)”) promulgated

thereunder.  The Members recognize that

certain benefits will accrue to all Members from this election to file a

consolidated federal income tax return. 

Therefore, the Members have determined that it is in their best

interests to enter into this Agreement to file a consolidated federal income

tax return.

 

In consideration of the mutual benefits to be derived from this

Agreement, each Member agrees as follows:

 

ARTICLE ONE

 

ELECTION TO FILE A CONSOLIDATED INCOME TAX

RETURN

 

The Members have agreed and elected to file a consolidated federal

income tax return pursuant to the provisions of IRC Section 1501, et seq. and

the Regulations thereunder.

 

ARTICLE TWO

 

METHOD OF ALLOCATION

 

The Members shall pay the consolidated tax liability of the Group in

the following manner:

 

Pursuant to Regulation Section 1.1552-1(c), Parent elects to allocate

the consolidated tax liability of the Group among the Members in accordance

with the ratio which that portion of the consolidated taxable income

attributable to each Member having taxable income bears to the consolidated

taxable

 

 

income.  This calculation shall

be made pursuant to Regulation Section 1.1552-1(a)(1).  Each Member shall pay such amount(s) to the

Parent on the applicable due date or dates that said amount(s) would have been

payable by the Member had it not been included in the Group’s consolidated

return, or as soon after that date as possible.  In lieu of actual payments, adjustments to intercompany payables

and receivables will be made if such exist on the subsidiary’s books.

 

ARTICLE THREE

 

COMPENSATING PAYMENTS

 

In conjunction with the method of allocation delineated in Article Two,

the Parent augments the method given at Regulation Section 1.1552-1(a)(1) by

electing the method given at Regulation Section 1.1502-33(d)(2)(ii) as follows:

 

Any Member(s) having losses or tax credits in a given year (“Loss

Member(s)”), resulting in reduced taxes for the other Member(s), shall be

reimbursed by the Member(s) enjoying the tax reduction (“Benefited

Member(s)”).  Generally, the

reimbursement of a Loss Member for the tax benefit of its losses or tax credits

will be made by reducing the Loss Member’s intercompany payables to the Benefited

Member(s).  If the tax benefit exceeds

the Loss Member’s intercompany payable to the Benefited Member(s), an actual

cash payment may be made.  The required

calculation shall be made pursuant to Regulation Section 1.1502-33(d)(2)(ii) by

allocating to each Benefited Member an additional tax liability amount equal to

100% of the excess, if any, of (1) the separate return tax liability of each

Benefited Member for the taxable year (computed as provided by Article Two),

over (2) the tax liability allocated to that Benefited Member under Article

Two.  This total additional tax

liability shall be paid (or adjustments to intercompany balances shall be made)

to the Loss Member(s) on the ratio of the separate return tax benefit to the

total tax benefit of all Loss Members having such separate return tax benefits.

 

Each Benefited Member having an additional

tax amount shall pay (or adjust intercompany balances, if possible, for) such

amount to the Loss Member(s) on the due date or dates that would have been applicable

to the Member had it not been included in the consolidated return, or as soon

thereafter as possible.

 

If a Member shall have made payments to (or

adjusted intercompany accounts for) another Member for any taxable year in

excess of its liability computed under Articles Two and Three (whether

determined on audit or otherwise), the amount of any overpayment (or

over-adjustment) shall be repaid (or readjusted) to that Member.  The repayment (or adjustment of intercompany

balances) shall be made to the Member no later than the date the payment would

have been made to this Member by the Internal Revenue Service had the Member

filed a separate return, or as soon thereafter as possible.

 

2

 

If a Member shall have made payments (or

intercompany account adjustments) to another Member for any taxable year in an

amount less than its liability computed under Articles Two and Three (whether

determined on audit or otherwise), the Member shall pay (or adjust intercompany

balances) the amount of such deficiency to the Member entitled to the

payment.  The payments (or intercompany

account adjustments) should be made no later than the date such payments would

have been required by the Internal Revenue Service if the Member had filed a

separate return, or as soon thereafter as possible.

 

Subsequent changes in the amount of a

Member’s tax liability and the reimbursement payment shall be considered an

intercompany liability or receivable and not a dividend or surplus contribution,

as the case may be, until such adjustment is paid.

 

ARTICLE FOUR

 

TERM AND CANCELLATION

 

This Agreement shall take effect as of the day of execution and shall

continue until terminated by the mutual agreement of the Members.  For federal income tax purposes, such

termination is subject to obtaining the requisite approval of such termination

by the Internal Revenue Service in accordance with Regulation Sections

1.1502-33(d)(3) and 1.1552-1(c).  In the

event any Member(s) ceases to be affiliated with the Group, this Agreement

automatically terminates as to that corporation.

 

ARTICLE FIVE

 

AMENDMENTS

 

This Agreement may, from time to time, be amended, modified, and

supplemented in such manner as may be mutually agreed upon by the Members.  Any amendment, modification or supplement to

the Agreement shall be in writing and shall be executed by a duly appointed

representative of each of the Members.

 

ARTICLE SIX

 

SEVERABILITY

 

Every article, term, condition, and provision of this Agreement is

declared to be independent of and severable from all other articles, terms,

conditions, and provisions of the Agreement. 

Invalidation, whether judicial or otherwise, of any article, term,

condition or provision contained in this Agreement shall in no way affect any

other provisions of this Agreement, all of which shall remain in full force and

effect.

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

executed by the duly authorized officers on the day and year set forth on page

1.

 

	

  Medical Assurance, Inc.

  	

  Professionals Group, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

  /s/ James J. Morello

  	

   

  	

  By:

  	

  /s/ Victor T. Adamo

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  Mutual Assurance Agency, Inc.

  	

  ProNational Casualty Company

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

  /s/ James J. Morello

  	

   

  	

  By:

  	

  /s/ Victor T. Adamo

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  The Medical Assurance Company, Inc.

  	

  PICOM Claims Service Corp.

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

  /s/ James J. Morello

  	

   

  	

  By:

  	

  /s/ Victor T. Adamo

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  Medical Assurance of West Virginia, Inc.

  	

  ProNational Insurance Agency

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

  /s/ James J. Morello

  	

   

  	

  By:

  	

  /s/ Jeffrey L. Bowlby

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  Mutual Assurance Agency of Ohio

  	

  Medadvantage, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

  /s/ James J. Morello

  	

   

  	

  By:

  	

  /s/ Victor T Adamo

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  Medical Assurance of Indiana Agency

  	

  American Insurance Management Corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

  /s/ James J. Morello

  	

   

  	

  By:

  	

  /s/ James J. Morello

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  Professionals National Insurance Co., Ltd.

  	

  Physicians Protective Plan, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

  /s/ James J. Morello

  	

   

  	

  By:

  	

  /s/ Jeffrey L. Bowlby

  	

   

  

 

4

 

	

   

  	

  Professionals Group Services Corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ Victor T. Adamo

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  ProNational Insurance Company

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ James J. Morello

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  MEEMIC Holdings, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ Christine C. Schmitt

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  MEEMIC Insurance Company

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ Christine C. Schmitt

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  MEEMIC Insurance Services Corp.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ Christine C. Schmitt

  	

   

  
					

 

5

 

EXHIBIT A

 

ProAssurance is the parent company of the following subsidiaries, which

are at least 80% owned by ProAssurance:

 

	

   

  	

   

  	

  Effective Date of Participation

  	

   

  
	

  MAI

  	

   

  	

  6/27/01

  	

   

  
	

  PGI

  	

   

  	

  6/27/01

  	

   

  

 

MAI includes the following subsidiaries:

 

	

   

  	

   

  	

  Effective

  Date of Participation

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Mutual Assurance Agency, Inc.

  	

   

  	

  6/27/01

  	

   

  
	

  The Medical Assurance

  Company, Inc.

  	

   

  	

  6/27/01

  	

   

  
	

  Medical Assurance of West

  Virginia, Inc.

  	

   

  	

  6/27/01

  	

   

  
	

  Mutual Assurance Agency of

  Ohio

  	

   

  	

  6/27/01

  	

   

  
	

  Medical Assurance of Indiana

  Agency

  	

   

  	

  6/27/01

  	

   

  

 

 

PGI includes the following subsidiaries:

 

	

   

  	

   

  	

  Effective

  Date of Participation

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  ProNational Casualty Company

  	

   

  	

  6/27/01

  	

   

  
	

  PICOM Claims Service Corp.

  	

   

  	

  6/27/01

  	

   

  
	

  ProNational Insurance Agency

  	

   

  	

  6/27/01

  	

   

  
	

  Medadvantage, Inc.

  	

   

  	

  6/27/01

  	

   

  
	

  American Insurance Management

  Corporation

  	

   

  	

  6/27/01

  	

   

  
	

  Physicians Protective Plan,

  Inc.

  	

   

  	

  6/27/01

  	

   

  
	

  Professionals Group Services

  Corporation

  	

   

  	

  6/27/01

  	

   

  
	

  ProNational Insurance Company

  	

   

  	

  6/27/01

  	

   

  
	

  MEEMIC Holdings, Inc.

  	

   

  	

  6/27/01

  	

   

  
	

  MEEMIC Insurance Company

  	

   

  	

  6/27/01

  	

   

  
	

  MEEMIC Insurance Services

  Corp.

  	

   

  	

  6/27/01

  	

   

  
	

  Professionals National

  Insurance Co., Ltd.

  	

   

  	

  6/27/01

  	

   

  

 

6EXHIBIT

10.1

 

AMENDMENT TO CREDIT AGREEMENT

 

This Amendment (“Amendment”)

to the Credit Agreement (“Agreement”) dated as of September 29,

1997, between Image Investors Co., a Delaware corporation (“Lender”),

and Image Entertainment, Inc., a California corporation and its subsidiary

(“Borrower”),

is entered into as of July 9, 2002.

 

R E C I T A L S:

 

WHEREAS, Borrower

and Lender entered into the Agreement as of September 29, 1997, pursuant

to which Lender loaned Five Million Dollars ($5,000,000) to Borrower, as

evidenced by the Convertible Subordinated Promissory Note (“Note”)

for $5,000,000 dated of October 29, 1997;

 

WHEREAS, the

parties have agreed to modify the interest rate, extend the term of Note three

(3) years to October 1, 2005, and amend certain terms and provisions

the Agreement as provided herein;

 

WHEREAS, the

remaining provisions of the Note and Agreement, including without limitation

the conversion ratio provided in Subsection 1.7.1 of the Agreement, will remain

as stated in the original Note and Agreement;

 

NOW, THEREFORE, in

consideration of the premises and other good and valuable consideration,

Borrower and Lender agree as follows:

 

A G R E E M E N T:

 

 

1.  Interest Rate.  The term “Interest Rate” as defined in

Section A of the Agreement shall be changed, effective as of

October 1, 2002, from eight percent (8%) per annum to the lower of the

Prime Rate as published in the Wall Street Journal plus five percent (5%) per

annum, or twelve percent (12%) per annum.

 

2.  Termination Date.  The term “Termination Date” as defined in

Section A of the Agreement is hereby extended from October 1, 2002 to

October 1, 2005.

 

2.  Interest Payment Date.  The term “Interest Payment Date” as defined

in Section A of the Agreement shall be changed, effective as of October 1,

2002, to the first day of each October, January, April and July of each year.

 

3.  Payment of Principal.  Commencing on October 1, 2002, in

addition to the required payment of interest, Borrower will make a quarterly

payment of principal in the amount of Two Hundred Fifty Thousand Dollars

($250,000) on each Interest Payment Date through July 1, 2003 ($1,000,000

in aggregate-first year of extension), in the amount of Three Hundred

Seventy-Five Thousand Dollars ($375,000) on each Interest Payment Date from

October 1, 2003 through July 1, 2004 ($1,500,000 in aggregate-second

year of extension), and in the amount of Six Hundred Twenty-Five Thousand

Dollars ($625,000) on each Interest Payment Date from October 1, 2004

through July 1, 2005 ($2,500,000 in aggregate-third year of extension).

 

4.  Additional Payments.  Borrower will, subject to the approval of

Foothill Capital Corporation, pay Lender an amount equal to the lesser of Two

Million Five Hundred Thousand Dollars ($2,500,000) or seventy-five percent

(75%) of Borrower’s net cash proceeds from the occurrence of either or both of

the following transactions: (a) Borrower selling and leasing back that

certain real property commonly known as 6650 South Spencer, Las Vegas, Nevada,

or (b) each instance of Borrower selling its common stock or other equity

securities. Any such payments will be applied to the principal balance of the

Note and offset, in reverse order commencing with the final payment, the

Debtor’s obligation to make the principal payments provided in Section 3

above.

 

 

5.  Preservation of the Agreement.  Except as specifically modified by the terms

of this Amendment, all the terms, conditions, provisions, covenants,

representations, warranties, and agreements contained in the Agreement shall

remain in full force and effect.

 

IN WITNESS WHEREOF,

the parties hereto have caused this Amendment to be duly executed and delivered

by their proper and duly authorized officers.

 

	

  LENDER:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  IMAGE

  INVESTORS CO.

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ STUART SUBOTNICK

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Name:

  	

  Stuart Subotnick

  	

   

  	

   

  	

   

  
	

  Title:

  	

  Executive Vice

  President

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  BORROWER:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Image

  Entertainment, Inc.

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ MARTIN W. GREENWALD

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Martin W. Greenwald

  	

   

  
	

   

  	

   

  	

  Title:

  	

  President

  	

   

  
							

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]