EXHIBIT 10.2
FIRST AMENDMENT TO INSURANCE
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PREMIUM FINANCING MANAGEMENT AGREEMENT AND GUARANTIES
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THIS FIRST AMENDMENT TO INSURANCE PREMIUM FINANCING MANAGEMENT
AGREEMENT AND GUARANTIES is made as of the ___ day of October, 1995, by and
among Pan American Bank, a federal savings bank ("Bank"), BPN Corporation, a
California corporation ("Contractor"), and Xxxxxxxxx X. X'Xxxx and Xxxxx Xxxxxx
and Xxxxxxx Xxxxxx (individually, a "Guarantor" and collectively the
"Guarantors").
R E C I T A L S:
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A. Bank and Contractor are parties to that certain Insurance Premium
Financing Management Agreement, dated May 17, 1995 under which Contractor is to
provide Bank with management and related administrative services in connection
with the operation of the insurance premium finance loan business to be
conducted by the Bank (the "Agreement"). Guarantors are the sole shareholders of
Contractor and have guarantied the payment of certain obligations of Contractor
arising under the Agreement under Guaranties dated as of May 17, 1995 (each a
"Guaranty" and collectively the "Guaranties"), subject to the dollar limitations
set forth therein.
B. Guarantors and Contractor have requested that the Bank increase
the aggregate amount of IPF Loans (as defined in the Agreement) to be provided
to brokers in accordance with the provisions of Section 3.3(f) of the Agreement
from $200,000 to $1,500,000.
C. The Bank is willing to extend such additional credit in
accordance with the terms of the Agreement to brokers provided that the
Guarantors agree to increase the dollar limitations applicable to the Guaranties
as provided herein.
D. All capitalized terms used herein and not otherwise defined shall
have the meaning set forth therefor in the Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Modifications to the Agreement. The Agreement is hereby amended
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by replacing subsection 3.3(f) with the following:
"(f) Allow for advances to be made on IPF Loans
financing broker's fees, the aggregate amount of
which shall not exceed, without further review by
Bank, $1,500,000, and which loans shall comply
with the requirements of Schedule 1 hereto and such
other requirements as may be reasonably imposed
by Bank."
2. Modifications to the Guaranties. The Guaranties are hereby
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amended as provided below:
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(a) The Guaranty of Xxxxxxxxx X. X'Xxxx is amended by replacing
paragraph 13 thereof with the following:
"13. The amount of this Guaranty and the liability
of the Guarantor hereunder shall be limited to
$500,000 plus any costs of enforcement of this
Guaranty, including attorneys' fees."
(b) The Guaranty of Xxxxx Xxxxxx and Xxxxxxx Xxxxxx shall be
amended by replacing paragraph 13 thereof as follows:
"13. The amount of this Guaranty and the liability
of the Guarantor hereunder shall be limited to
$750,000 plus any costs of enforcement of this
Guaranty, including attorneys' fees."
3. Except as modified by this Amendment, all other terms and
provisions of the Agreement and the Guaranties shall remain in full force and
effect, without modification.
IN WITNESS WHEREOF, the undersigned have executed the foregoing
Amendment.
BANK: PAN AMERICAN BANK
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A FEDERAL SAVINGS BANK
By: /s/ XXXXXXXX X. GRILL
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Its: President
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CONTRACTOR: BPN CORPORATION
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A CALIFORNIA CORPORATION
By: /s/ XXXXX X. XXXXXX
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Its: President
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/s/ XXXXXXXXX X. X'XXXX
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GUARANTORS: XXXXXXXXX X. X'XXXX
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/s/ XXXXX X. XXXXXX
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XXXXX XXXXXX
/s/ XXXXXXX XXXXXX
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XXXXXXX XXXXXX
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SCHEDULE 1
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Customer Financed Broker Fees - Requirements
a. A minimum broker reserve target based on a multiple of 2 times average
monthly volume of financed broker fees with a minimum reserve accumulation
rate of 25% per contract of gross fees financed.
b. Maximum individual gross fee to be financed per contract. $ 300
c. Maximum net outstandings related to fees financed through individual $ 100,000
producer source subject to an offsetting reserve of $25,000.
d. Maximum net outstandings related to fees financed through Eastwood. $ 500,000
(Above $200,000 based on separate justification and support.)
e. Maximum net outstandings at any time as follows before broker reserve $ 750,000
(assumed to be a minimum of $375,000)
f. The reserve multiple of 2 times average monthly volume as well as the
reserve accumulation rate of 25% are factors based on a 30% average
cancellation rate and timely settlement of any receivables. Any significant
variation from these base assumptions may be cause for revision of the
aforementioned factors are relates to any individual producer.
g. Broker must be billed within 30 days for unpaid amount of broker fees
financed on customer accounts cancelled and collected within 30 days.
h. Overview of underlying assumptions:
Gross broker fees financed. $1,500,000
Less: Amount paid by customer from downpayment. (225,000)
Less: Customer contract payments allocated to broker fees financed. (465,000)
Less: Collected from brokers to reimburse for cancelled contracts. (181,500)
Resulting net outstanding $ 628,500
Maximum net outstandings at any time as follows before broker reserve $ 750,000
(assumed to be a minimum of $375,000)
NOTE: Any significant variation from these underlying assumptions may be
cause for changes in the program.
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