EXHIBIT 10 (bp)
October 31, 2002
Dorinco Reinsurance Company
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx
RE: Loan Agreement dated March 10, 1997, as amended by Amendment No. 1
executed August 14, 1998, Amendment No. 2 effective March 5, 1999,
Amendment No. 3 effective November 19, 1999, and Amendment No. 4
effective November 8, 2001 (the "Loan Agreement") between Hallmark
Financial Services, Inc. ("Borrower") and Dorinco Reinsurance Company
("Lender")
Dear Xx. Xxxxxxxxxxx:
The purpose of this letter is to obtain the express prior written consent of
Lender pursuant to Section 7.j.(i) of the Loan Agreement to Borrower
creating indebtedness for borrowed money in the original principal amount of
up to $9,000,000 to be evidenced by a promissory note in substantially the
form attached hereto. The purpose of this borrowing is to provide interim
financing for a proposed acquisition by Borrower, which we have previously
discussed with you on a confidential basis.
As you are aware, the payee of the promissory note, Newcastle Partners,
L.P., is an affiliate of Xxxx X. Xxxxxxx, the Chairman of the Board of
Directors of Borrower. In accordance with Section 6.p. of the Loan
Agreement, a special committee of the Board of Directors of Borrower
consisting solely of disinterested independent directors has determined that
this proposed interim loan transaction is in good faith and commercially
reasonable.
Please acknowledge Lender's consent to this proposed loan transaction by
executing and returning to the undersigned the enclosed duplicate original
of this letter. Thank you for your courtesy and cooperation in this matter.
Very truly yours,
Xxxxx X. Xxxxxxx
President and CEO
CONSENTED TO AND AGREED AS OF OCTOBER 31, 2002:
DORINCO REINSURANCE COMPANY
By: ______________________________
Name:_________________________
Title:__________________________
