FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (the "Agreement") is dated as of the
31st day of July, 1999 and is by and between SUMMIT BANK, a banking institution
of the State of New Jersey having an office at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 (the "Bank"); and XXXX GROUP INC., a Delaware corporation having
its principal executive offices located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Borrower").
WITNESSETH:
WHEREAS, the Borrower and the Bank have heretofore entered into that
certain Loan Agreement dated June 24, 1998 (the "Loan Agreement"); and
WHEREAS, the Borrower has requested the Bank to make certain amendments to
the Loan Agreement, and the Bank has agreed to do so upon the terms and
conditions described herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Except as otherwise indicated herein, all words and terms
defined in the Loan Agreement shall have the same meanings when used herein.
2. Amendment to Loan Agreement. The following definition appearing in
Section 1.1 of the Loan Agreement is hereby amended to read in its entirety as
follows:
"Revolving Loan Termination Date" shall mean October 29, 1999.
3. Substitute Note. Concurrently herewith, the Borrower is executing and
delivering to the Bank a substitute revolving note in the maximum principal
amount of $4,500,000 (the "Substitute Note") in substitution for, but not in
repayment of, that certain Revolving Note dated June 24, 1998 in the maximum
principal amount of $4,500,000 (the "Prior Note") previously issued by the
Borrower to the Bank. The execution and delivery by the Borrower of the
Substitute Note pursuant to the provisions hereof shall not constitute a
refinancing, repayment, accord and satisfaction or novation of the Prior Note or
the indebtedness evidenced thereby.
4. Representations and Warranties. In order to induce the Bank to enter
into this Agreement and amend the Loan Agreement as provided herein, the
Borrower hereby represents and warrants to the Bank that:
(a) All of the representations and warranties of the Borrower set
forth in Article IV of the Loan Agreement are true, complete and correct in
all material respects on and as of the date hereof with the same force and
effect as if made on and as of the date hereof and as if set forth at
length herein (except that representations and warranties which are
expressly stated to be as of a certain date are true, complete and correct
in all material respects as of such certain date).
(b) No Default or Event of Default presently exists and is continuing
on and as of the date hereof.
(c) Since the date of the Borrower's most recent financial statements
delivered to the Bank, no material adverse change has occurred in the
business, assets, liabilities, financial condition or results of operations
of the Borrower, and no event has occurred or failed to occur which is
likely to have a material adverse effect on the business, assets,
liabilities, financial condition or results of operations of the Borrower.
(d) The Borrower has full power and authority to execute, deliver and
perform any action or step which may be necessary to carry out the terms of
this Agreement and all other agreements, documents and instruments executed
and delivered by the Borrower to the Bank concurrently herewith or in
connection herewith (collectively, the "Amendment Documents"); each
Amendment Document to which the Borrower is a party has been duly executed
and delivered by the Borrower and is the legal, valid and binding
obligation of the Borrower enforceable in accordance with its terms,
subject to any applicable bankruptcy, insolvency, general equity principles
or other similar laws affecting the enforcement of creditors' rights
generally.
(e) The execution, delivery and performance of the Amendment Documents
will not (i) violate any provision of any existing law, statute, rule,
regulation or ordinance, (ii) conflict with, result in a breach of, or
constitute a default under (A) the certificate of incorporation or by-laws
of the Borrower, (B) any order, judgment, award or decree of any court,
governmental authority, bureau or agency, or (C) any mortgage, indenture,
lease, contract or other agreement or undertaking to which the Borrower is
a party or by which the Borrower or any of its properties or assets may be
bound, or (iii) result in the creation or imposition of any lien or other
encumbrance upon or with respect to any property or asset now owned or
hereafter acquired by the Borrower.
(f) No consent, license, permit, approval or authorization of,
exemption by, notice to, report to, or registration, filing or declaration
with any person is required in connection with the execution, delivery,
performance or validity of the Amendment Documents or the transactions
contemplated thereby.
5. No Defenses. The Borrower expressly acknowledges and agrees that (a) as
of August 2, 1999, the outstanding principal amount of (i) the Revolving Loan is
$0, (ii) all Acquisition Advances is $0, and (iii) the Term Loan is
$3,896,079.21, and (b) such amounts, together with accrued interest thereon, are
owed to the Bank without defense, offset or counterclaim of any nature
whatsoever. The Borrower hereby waives and releases all claims against the Bank
with respect to the Obligations and the documents evidencing or securing the
same.
6. Bank Costs. The Borrower shall reimburse the Bank on demand for all
costs, including legal fees and expenses, incurred by the Bank in connection
with this Agreement, the other Amendment Documents and the transactions
referenced herein. If such amounts are not paid within ten days of the Bank's
request therefor, the Borrower hereby authorizes the Bank to charge the
Borrower's account for the amount of such fees and expenses.
7. No Change. Except as expressly set forth herein, all of the terms and
provisions of the Loan Agreement shall continue in full force and effect.
8. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts and all such counterparts taken together shall constitute
one and the same instrument.
9. Governing Law. This Agreement shall be governed by and construed in
accordance the laws of the State of New Jersey.
2
IN WITNESS WHEREOF, the Borrower and the Bank have executed this Agreement
as of the date above written.
SUMMIT BANK
By: /S/ Xxxx Xxxxx
-------------------------
Vice President
XXXX GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
and Chief Financial
Officer
3
STATE OF NEW JERSEY :
:ss.
COUNTY OF ESSEX :
BE IT REMEMBERED, that on this 12th day of August, 1999, before me, the
subscriber, personally appeared XXXX XXXXX, who I am satisfied is the Vice
President of SUMMIT BANK, the corporation named in and subscribing to the within
instrument; and she, being by me duly sworn, acknowledged, deposed and said
that, in her capacity as such officer, she executed the foregoing instrument on
behalf of said corporation for the uses and purposes therein expressed.
/s/ Xxxx Xxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxx
A Notary Public of New Jersey
My Commission Expires March 8, 2002
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 6 day of August, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of XXXX GROUP INC., the
corporation named in and subscribing to the foregoing instrument; and he, being
by me duly sworn, acknowledged, deposed and said that such instrument was made
by such corporation, and that he signed and delivered the same as such officer
of such corporation as its voluntary act and deed for the uses and purposes
therein expressed.
/s/ XXX X. XXXXXXX
---------------------------
XXX X. XXXXXXX
Notary Public State of New York
No. 31 4786741
Qualified in New York County
Commission Expires August 31, 1999
4
SUBSTITUTE REVOLVING NOTE
$4,500,000 As of July 3l, 1999
FOR VALUE RECEIVED, the undersigned, XXXX GROUP INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay on or
before October 29, 1999 (the "Revolving Loan Termination Date"), to the order of
SUMMIT BANK, a banking institution of the State of New Jersey (the "Bank"), at
the office of the Bank located at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx, or
at such other location as the Bank shall designate, in lawful money of the
United States of America and in immediately available funds, the principal
amount of the lesser of(i) $4,500,000 or (ii) so much thereof as shall have been
advanced (the "Advances") by the Bank to the Borrower pursuant to that certain
Loan Agreement dated June 24, 1998, as amended, between the Borrower and the
Bank (the "Agreement"). Terms defined in the Agreement shall have the same
meanings when used herein.
The Borrower further agrees to pay interest in like money at such office on
the unpaid principal amount hereof from time to time at a rate or rates per
annum and at such times as are provided in the Agreement.
The Borrower shall pay to the Bank a late charge (the "Late Charge") in an
amount equal to five percent (5%) of any payment which is more than ten (10)
days in arrears to cover the extra expense involved in handling delinquent
payments, but in no event shall any Late Charge be less than $25 or more than
$2,500. The term "payments" shall be construed to include principal, interest,
fees and any other amount due under the terms of this Note or any of the other
Loan Documents. Acceptance by the Bank of payment of a Late Charge shall in no
way be construed to be an election of remedies or waiver by the Bank of any of
its rights at law or under the terms of any of the Loan Documents.
Subject to the provisions of Section 2.25 of the Agreement, this Note may
be prepaid, in whole or in part, at one time or from time to time, without
premium or penalty in accordance with the provisions of the Agreement.
All payments made hereunder shall be applied: first, to any fees or other
charges owing to the Bank hereunder; second, to accrued and unpaid interest; and
third, to the outstanding principal balance hereof. Notwithstanding the
foregoing, upon the occurrence of an Event of Default, the Bank may apply
payments received hereunder in such manner as it shall determine in its sole and
absolute discretion.
This Note is secured by the Collateral described in the Agreement, the
Pledge and Security Agreement and the other Loan Documents, and is guaranteed by
the Guarantors pursuant to the Guaranty Agreement.
This Note is being executed and delivered by the Borrower to the Bank in
substitution for that certain Revolving Note dated June 24, 1998 from the
Borrower in favor of the Bank in the maximum principal amount of $4,500,000 (the
"Prior Note"). The execution and
delivery of this Note shall not constitute a repayment, refinancing, accord and
satisfaction or novation of the Prior Note or the indebtedness evidenced
thereby.
The Bank may declare this Note to be immediately due and payable if any of
the following events shall have occurred and be continuing:
(1) Failure by the Borrower to make any payment of principal or
interest under this Note on any date when due; or
(2) An Event of Default shall have occurred under the Agreement or any
of the other Loan Documents.
Upon the occurrence of any Event of Default, the Bank may, in addition to
such other and further rights and remedies as provided by law or under the
Agreement or under any of the other Loan Documents, (i) collect interest on such
overdue amount from the date of such maturity until paid at a rate per annum
equal to three (3%) percent in excess of Base Rate, (ii) setoff such amount
against any deposit account maintained in the Bank by the Borrower, and such
right of setoff shall be deemed to have been exercised immediately upon such
stated or accelerated maturity even though such setoff is not noted on the
records of the Bank until a later time and (iii) hold as security any property
heretofore or hereafter delivered into the custody, control or possession of the
Bank or any entity acting as agent for the Bank by any person liable for the
payment of this Note.
This Note may not be changed orally, but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change, modification
or discharge is sought.
Should the indebtedness represented by this Note or any part hereof be
collected at law or in equity, or in bankruptcy, receivership, or any other
court proceeding, or should this Note be placed in the hands of attorneys for
collection upon default, the Borrower agrees to pay, in addition to the
principal and interest due and payable hereon, all reasonable costs of
collecting or attempting to collect this Note, including reasonable attorneys'
fees and expenses.
This Note shall be and remain in full force and effect and in no way
impaired until the actual payment thereof to the Bank, its successors or
assigns.
Anything herein to the contrary notwithstanding, the obligations of the
Borrower under this Note shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt of any such payment by
the Bank would be contrary to provisions of law applicable to the Bank limiting
the maximum rate of interest which may be charged or collected by the Bank.
The Borrower and all endorsers and guarantors of this Note hereby waive
presentment, demand for payment, protest and notice of dishonor of this Note.
This Note is binding upon the Borrower and its successors and assigns and
shall inure to the benefit of the Bank and its successors and assigns.
2
This Note and the rights and obligations of the parties hereto shall be
subject to and governed by the laws of the State of New Jersey.
IN WITNESS WHEREOF, the undersigned has caused this Substitute Revolving
Note to be duly executed by its authorized officer as of the day and year above
written.
XXXX GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
& Chief Financial Officer
3
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 6 day of August, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of XXXX GROUP INC., the
corporation named in and subscribing to the foregoing instrument; and he, being
by me duly sworn, acknowledged, deposed and said that such instrument was made
by such corporation, and that he signed and delivered the same as such officer
of such corporation as its voluntary act and deed for the uses and purposes
therein expressed.
/s/ XXX X. XXXXXXX
---------------------------
XXX X. XXXXXXX
Notary Public State of New York
No. 31 4786741
Qualified in New York County
Commission Expires August 31, 1999
4
[signature continued from previous page]
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 1 day of November, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of PROGRAM BROKERAGE
CORPORATION, the corporation named in and subscribing to the foregoing
instrument; and he, being by me duly sworn, acknowledged, deposed and said that
such instrument was made by such corporation, and that he signed and delivered
the same as such officer of such corporation as its voluntary act and deed for
the uses and purposes therein expressed.
/s/ XXX X. XXXXXXX
----------------------------------
XXX X. XXXXXXX
Notary Public State of New York
No. 02F14786741
Qualified in New York County
Commission Expires August 31, 2001
5
Letterhead XXXX GROUP INC.
As of July 31, 1999
Summit Bank
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Re: Reaffirmation of Guaranty in connection with
Extension of Various Loans from Summit Bank to
Xxxx Group Inc.
----------------------------------------------
Dear Sir or Madam:
Each of the undersigned guarantors (collectively, the "Guarantors")
executed and delivered to Summit Bank (the "Bank") a certain Guaranty Agreement
dated June 24, 1998 (the "Guaranty"), pursuant to which each of the Guarantors
jointly, severally and unconditionally guaranteed to the Bank all of the
obligations of Xxxx Group Inc. (the "Borrower") under that certain Loan
Agreement dated June 24, 1998 between the Borrower and the Bank.
The Guarantors hereby acknowledge that, concurrently herewith, the Borrower
and the Bank are entering into a First Amendment to Loan Agreement (the "First
Amendment"), and in connection therewith, the Borrower is executing and
delivering to the Bank a Substitute Revolving Note in the maximum principal
amount of $4,500,000 (the "Substitute Note") pursuant to which, among other
things, the maturity date of the existing Revolving Note dated June 24, 1998
from the Borrower to the Bank in the maximum principal amount of $4,500,000 is
being extended to October 29, 1999. The Guarantors hereby further acknowledge
that, as a condition to entering into the First Amendment and accepting the
Substitute Note, the Bank has required that each of the Guarantors reaffirm the
Guaranty to the Bank.
Accordingly, each of the Guarantors hereby (a) ratifies and reaffirms its
obligations under the Guaranty, all of the terms and conditions of which remain
in full force and effect, (b) consents to the execution and delivery of the
First Amendment and the Substitute Note by the Borrower and (c) acknowledges and
agrees that the Guaranty shall continue to apply with full force and effect to
all obligations of the Borrower to the Bank, including without limitation, the
obligations under the Substitute Note. As of the date hereof there are no
counterclaims, offsets or defenses to the Guarantors' obligations under the
Guaranty and the Guarantors waive and release all claims against the Bank which
exist on the date hereof in connection therewith.
This Reaffirmation of Guaranty may be signed in any number of counterparts,
all of which, when taken together, shall constitute but one and the same
instrument.
XXXX INSURANCE ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
& Chief Financial Officer
XXXX CORPORATION OF CONNECTICUT
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
& Chief Financial Officer
XXXX ADMINISTRATORS CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
& Chief Financial Officer
XXXX SERVICES CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
& Chief Financial Officer
XXXX-WESTERN INSURANCE &
RISK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
& Chief Financial Officer
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
2
PROGRAM BROKERAGE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
& Chief Financial Officer
3
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 6 day of August, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of XXXX INSURANCE ASSOCIATES,
INC., the corporation named in and subscribing to the foregoing instrument; and
he, being by me duly sworn, acknowledged, deposed and said that such instrument
was made by such corporation, and that he signed and delivered the same as such
officer of such corporation as its voluntary act and deed for the uses and
purposes therein expressed.
Xxx X. Xxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires August 31, 1999 /s/ Xxx X. Xxxxxxx
------------------
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 6 day of August, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of XXXX CORPORATION OF
CONNECTICUT, the corporation named in and subscribing to the foregoing
instrument; and he, being by me duly sworn, acknowledged, deposed and said that
such instrument was made by such corporation, and that he signed and delivered
the same as such officer of such corporation as its voluntary act and deed for
the uses and purposes therein expressed.
Xxx X. Xxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires August 31, 1999 /s/ Xxx X. Xxxxxxx
------------------
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 6 day of August, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of XXXX ADMINISTRATORS CORP.,
the corporation named in and subscribing to the foregoing instrument; and he,
being by me duly sworn, acknowledged, deposed and said that such instrument was
made by such corporation, and that he signed and delivered the same as such
officer of such corporation as its voluntary act and deed for the uses and
purposes therein expressed.
Xxx X. Xxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires August 31, 1999 /s/ Xxx X. Xxxxxxx
------------------
4
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 6 day of August, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of XXXX SERVICES CORP., the
corporation named in and subscribing to the foregoing instrument; and he, being
by me duly sworn, acknowledged, deposed and said that such installment was made
by such corporation, and that he signed and delivered the same as such officer
of such corporation as its voluntary act and deed for the uses and purposes
therein expressed.
Xxx X. Xxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires August 31, 1999 /s/ Xxx X. Xxxxxxx
------------------
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 6 day of August, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of XXXX-WESTERN INSURANCE &
RISK SERVICES, INC., the corporation named in and subscribing to the foregoing
instrument; and he, being by me duly sworn, acknowledged, deposed and said that
such instrument was made by such corporation, and that he signed and delivered
the same as such officer of such corporation as its voluntary act and deed for
the uses and purposes therein expressed.
Xxx X. Xxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires August 31, 1999 /s/ Xxx X. Xxxxxxx
------------------
STATE OF NY :
ss.
COUNTY OF NY :
BE IT REMEMBERED, that on this 6 day of August, 1999, before me, the
subscriber, personally appeared Xxxxxxx X. Xxxxxxx, who I am satisfied is the
Senior Vice President and Chief Financial Officer of PROGRAM BROKERAGE
CORPORATION, the corporation named in and subscribing to the foregoing
instrument; and he, being by me duly sworn, acknowledged, deposed and said that
such instrument was made by such corporation, and that he signed and delivered
the same as such officer of such corporation as its voluntary act and deed for
the uses and purposes therein expressed.
Xxx X. Xxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires August 31, 1999 /s/ Xxx X. Xxxxxxx
------------------
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