EXHIBIT 10.14
THIRD AMENDMENT TO SECURED LOAN AGREEMENT
-----------------------------------------
This Third Amendment, dated as of March 31, 1996 (the "Third Amendment")
to that certain Secured Loan Agreement, dated as of June 4, 1993, between
Intercargo Corporation, a Delaware corporation, and LaSalle National Bank
(hereinafter the "Original Agreement"), as amended pursuant to the First
Amendment to the Original Agreement, dated January 1, 1995 (the "First
Amendment"), the Second Amendment to the Original Agreement, dated as of
June 4, 1995 (the "Second Amendment") (together, the Original Agreement, as
amended by the First Amendment and the Second Amendment, shall be deemed the
"Agreement").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and the Bank desire to amend certain provisions of the
Agreement.
NOW, THEREFORE, the Company and the Bank hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
2. Section 1.1 of the Agreement is hereby amended by adding therefor the
following definitions:
""Amended and Restated Revolving Note" shall mean that certain
$15,000,000 Amended and Restated Revolving Note of the Company of even date
herewith. All references in the Agreement to the Revolving Note shall mean
the Amended and Restated Revolving Note.
"Applicable Margin" means the rate specified below, subject to quarterly
adjustments:
When Following Status Exists Applicable Margin
for any Determination Date for LIBOR Portion is:
Level I Status 1.75%
Level II Status 1.90%
Notwithstanding the foregoing, if the Consolidated Net Income of the
Company and its Subsidiaries for the 1996 fiscal year equals or exceeds that set
forth in the Company's 1996 Fiscal Year budget (a copy of which is attached
hereto as Annex 1) and the Company is otherwise in compliance with its covenants
and other obligations in the Agreement, the "Applicable Margin" for all
applicable periods thereafter (commencing on the next applicable Determination
Date, estimated at April 30, 1997) shall mean the rate specified below, subject
to quarterly adjustments:
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When Following Status Exists Applicable Margin
for any Determination Date for LIBOR Portion is:
Level I Status 1.5%
Level II Status 1.65%
"Determination Date" means the date on or before the date that is thirty
(30) Business Days after the date on which the Company is obligated to deliver a
Compliance Certificate to the Bank pursuant to Section 8.1 hereof.
"Interest Period" shall mean, with regard to any LIBOR Loan, successive
one, two, three or six months periods as selected from time to time by the
Company by notice given to the Bank not less than three Business Days prior to
the first day of each respective Interest Period; provided, however, that: (i)
each such Interest Period occurring after the initial Interest Period shall
commence on the day on which the next preceding Interest Period expires, (ii)
whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, however, that
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, then the last day of such Interest Period
shall occur on the immediately preceding Business Day; and (iii) the final
Interest Period shall be such that its expiration occurs on or before the
Revolving Note Maturity Date.
"Level I Status" means for any Determination Date, that as of the close of
the accounting period with reference to which such Determination Date was set,
that both
(i) the ratio determined pursuant to Section 8.21(e) hereof equals or
exceeds 3.00:1.00; and
(ii) the ratio determined pursuant to Section 8.21(b) hereof is less than
or equal to 0.25:1.00.
"Level II Status" means for any Determination Date, that as of the close of
the accounting period with reference to which such Determination Date was set,
that either
(i) the ratio determined pursuant to Section 8.21(e) hereof is less than
3.00:1.00; or
(ii) the ratio determined pursuant to Section 8.21(b) hereof is greater
than 0.25:1.00.
"LIBOR" shall mean a rate of interest equal to the per annum rate of
interest at which U.S. dollar deposits in an amount comparable to the amount of
the relevant LIBOR Loan and for a period equal to the relevant Interest Period
are offered generally to the Bank (rounded upward if necessary, to the nearest
1/16 of 1.00%) in the London Interbank Eurodollar market at 11:00 a.m. (London
time) two Business Days prior to the commencement of each Interest Period, or as
LIBOR is otherwise determined by the Bank in its sole and absolute discretion,
such rate to remain fixed for such Interest Period. The Bank's determination of
LIBOR as provided above shall be conclusive, absent manifest error.
"LIBOR Loan" or "LIBOR Loans" shall mean that portion, and collectively
those portions, of the aggregate outstanding principal balance of the Revolving
Loans that will bear interest at LIBOR plus the Applicable Margin, per annum, of
which at any time and from time to time, the Company may identify no more than
five (5) separate Revolving Loans which will bear interest based on LIBOR, of
which any particular LIBOR
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Loan must be in an amount equal to $1,000,000.00 or a higher amount in
$100,000.00 increments.
"Reference Rate Loan" or "Reference Rate Loans" shall mean that portion,
and collectively, those portions of the aggregate outstanding principal balance
of the Revolving Loans that will bear interest at the Reference Rate, of which
any particular Reference Rate Loan must be in an amount equal to $10,000.00 or a
higher integral multiple of $5,000.00.
"Regulatory Change" shall mean the introduction of, or any change in any
applicable law, treaty, rule, regulation or guideline or in the interpretation
or administration thereof by any governmental authority or any central bank or
other fiscal, monetary or other authority having jurisdiction over the Bank of
its lending office."
3. The definition of "Tangible Net Worth" in Section 1.1 of the Agreement
shall be amended by deleting same and substituting therefore the following
language:
""Tangible Net Worth" means at any time the Company's, and
its Subsidiaries', consolidated net worth determined in
accordance with GAAP after excluding therefrom (i) Foreign
Currency Adjustments; and (ii) the aggregate amount of any
intangible assets of the Company and its Subsidiaries,
including without limitation, covenants not to compete,
prepayments (but expressly without excluding from such
consolidated net worth prepaid reinsurance premiums),
deferred changes, goodwill, franchises, licenses, patents,
trademarks, trade names, copyrights, service marks and
brand names."
4. The Agreement is hereby amended by deleting the following definitions:
"Term Loan," "Term Loan Commitment" and "Term Note" from Section 1.1
thereof and by deleting reference to such terms throughout the Agreement.
5. The definition of "Revolving Note Maturity Date" in Section 1.1 of the
Agreement shall be amended by deleting the same and substituting therefor
the following language:
""Revolving Note Maturity Date" means December 1, 2001."
6. The Agreement is amended by deleting the definition of "Business Day" from
Section 1.1 thereof and substituting the following: "Business Day" shall
mean (i) for all purposes other than as covered by clause (ii) hereof, any
day, other than a Saturday, Sunday, a day that is a legal holiday under the
laws of the State of Illinois or any other day on which banking
institutions located in Chicago, Illinois are authorized or required by law
or other governmental action to close; and (ii) with respect to
determinations in connection with, and payments of principal and interest
in LIBOR Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in U.S. dollar
deposits in the London Interbank Eurodollar Market."
7. The Agreement is hereby amended by deleting Section 2.1 and adding the
following in its place and stead:
"Bank's Revolving Loan Commitment". On the terms and subject to the
conditions set forth in this Agreement, the Bank agrees to make revolving
loans (such loans herein, collectively, called "Revolving Loans" and,
individually, called a "Revolving Loan") to the Company from time to time
before the "Revolving Note Maturity Date," in such aggregate amounts as the
Company may, from time to time, request but not exceeding the amounts and
with respect to the time period set forth below (and subject to reduction
pursuant to the remaining provisions of this Agreement):
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Aggregate Amount of
Revolving Loans On or Before
--------------- ------------
$15,000,000.00 12/31/96
$13,750,000.00 01/01/97
$12,500,000.00 07/01/97
$11,250,000.00 01/01/98
$10,000,000.00 07/01/98
$ 8,750,000.00 01/01/99
$ 7,500,000.00 07/01/99
$ 6,250,000.00 01/01/00
$ 5,000,000.00 07/01/00
$ 3,750,000.00 01/01/01
$ 2,500,000.00 07/01/01
$ -0- Revolving Note
Maturity Date
On the terms and subject to the conditions set forth in this Agreement, the
Company shall have the right to repay and reborrow any of the Revolving Loans.
The Bank's commitment to make Revolving Loans is herein called the "Revolving
Credit Commitment."
8. Sections 2.2 and 3.2 of the Agreement are hereby deleted.
9. Section 2.3 of the Agreement is hereby amended by deleting the initial two
sentences of said Section and by the addition of the following at the
beginning of such Section:
"Each Revolving Loan may be advanced either as a Reference Rate Loan
or a LIBOR Loan, provided, however, that at any time and from time to time,
the Company may identify no more than five (5) Revolving Loans which may be
LIBOR Loans. A request for a Reference Rate Loan must be (i) received by
no Later than 11:00 a.m. Chicago, Illinois time, on the day it is to be
funded, and (ii) in an amount equal to $10,000.00 or a higher integral
multiple of $5,000.00. A request for a LIBOR Loan must be (i) received by
no later than 11:00 a.m. Chicago, Illinois time, three days before the day
it is to be funded, and (ii) in an amount equal to $1,000,000.00 or a
higher amount in $100,000.00 increments. If for any reason the Company
shall fail to select timely an Interest Period for an existing LIBOR Loan,
then such LIBOR Loan shall be immediately converted to a Reference Rate
Loan on the last Business Day of the then existing Interest Period, all
without demand, presentment, protest or notice of any kind, all of which
are hereby waived by the Company. The proceeds of each Reference Rate Loan
or LIBOR Loan shall be made available at the office of the Bank by credit
to the account of the Company or by other means requested by the Company
and acceptable to the Bank.
The Bank is authorized to rely on the telephonic, telecopy or
telegraphic loan requests which the Bank believes in its good faith
judgment to emanate from a properly authorized representative of the
Company, whether or not that is in the fact the case. The Company does
hereby irrevocably confirm, ratify and approve all such advances by the
Bank and does hereby indemnify the Bank against losses and expenses
(including court costs, attorneys' and paralegals' fees) and shall hold the
Bank harmless with respect thereto."
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10. The Agreement is hereby amended by the addition of the following Section
2.4 - 2.6:
"2.4 Eurodollar Advances and Conversions. Provided no Event of
Default has occurred and is continuing, Company shall have the option,
subject to the other provisions of this Agreement, to (i) request that any
Revolving Loan or any portion of a Revolving Loan hereunder be a LIBOR Loan
by giving telephonic notice to Bank at least three (3) Business Days prior
to the day any LIBOR Loan is to be made hereunder specifying the applicable
Interest Period; provided that Company gives Bank written confirmation by
facsimile of its telephone notice prior to the day any LIBOR Loan is to be
made hereunder, and (ii) convert on any Business Day, all or any portion of
the outstanding principal amount of any Revolving Loan or portion thereof
from one type of interest rate Revolving Loan to another type of interest
rate Revolving Loan by giving at least three (3) Business Days prior
telephonic notice to Bank thereof; provided that Company gives Bank written
confirmation of its telephonic notice by facsimile prior to the day any
such conversion is made herunder. Notwithstanding the foregoing, no LIBOR
Loan may be converted into a Reference Rate Loan pursuant to this Section
2.4 except effective on the last day of the Interest Period applicable
thereto.
2.5 LIBOR Unavailability. If the Bank determines in good faith
(which determination shall be conclusive, absent manifest error) prior to
the commencement of any Interest Period that (i) U.S. dollar deposits of
sufficient amount and maturity for funding any LIBOR Loan are not available
to the Bank in the London Interbank Eurodollar market in the ordinary
course of business, or (ii) by reason of circumstances affecting the London
Interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable to the relevant LIBOR
Loan, the Bank shall promptly notify the Company thereof and, so long as
the foregoing conditions continue, Revolving Loans may not be advanced as a
LIBOR Loan thereafter. In addition, at the Company's option, each existing
LIBOR Loan shall be immediately (i) converted to a Reference Rate Loan on
the last Business Day of the then existing Interest Period, or (ii) due and
payable on the last Business Day of the then existing Interest Period,
without further demand, presentment, protest or notice of any kind, all of
which are hereby waived by the Company.
2.6 Regulatory Change. In addition, if, after the date hereof, a
Regulatory Change shall, in the reasonable determination of the Bank, make
it unlawful for the Bank to make or maintain the LIBOR Loans, then the Bank
shall promptly notify the Company, and Revolving Loans may not be advanced
as a LIBOR Loan thereafter. In addition, at the Company's option, each
existing LIBOR Loan shall be immediately (i) converted to a Reference Rate
Loan on the last Business Day of the then existing Interest Period or on
such earlier date as required by law, or (ii) due and payable on the last
Business Day of the then existing Interest Period or on such earlier date
as required by law, all without further demand, presentment, protest or
notice of any kind, all of which are hereby waived by the Company. Further,
the Company shall pay to the Bank, on demand, such additional amounts as
the Bank shall, from time to time, determine are sufficient to compensate
and indemnify the Bank for such increased cost or reduced amount."
11. Sections 4.1 and 4.2 of the Agreement are hereby deleted and the following
shall be inserted in its place and stead:
"4.1 Interest Rates on Loan. The Company hereby promises to pay
interest on the unpaid
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principal amount of the Revolving Loan for the period commencing on the
date of the Revolving Loan until the Revolving Loan is paid in full at a
rate per annum equal to the Reference Rate from time to time in effect,
plus (a) in the case of the Reference Rate Loans, at the Reference Rate,
and (b) in the case of the LIBOR Loans, at LIBOR plus the Applicable
Margin, provided, however, that in the event that any principal of the
Revolving Loan is not paid when due (whether by acceleration or otherwise)
or upon the occurrence of an Event of Default, the unpaid principal amount
of the Revolving Loan shall bear interest after the due date of such
principal until such principal is paid at a rate per annum equal to the
Reference Rate (whether or not such Revolving Loan is a Reference Rate Loan
or a LIBOR Loan), plus two and one-half percent (2½%).
4.2 Interest Payment Dates. Accrued interest on Reference Rate
Loans shall be payable in arrears, monthly on the first Business Day of
each month and through maturity. Accrued and unpaid interest on the unpaid
principal balance of the LIBOR Loans shall be payable on the last Business
Day of each Interest Period, commencing on the first such date to occur
after the date hereof, on the date of any principal repayment of a LIBOR
Loan and on the Revolving Note Maturity Date. After maturity (whether by
acceleration or otherwise) accrued and unpaid interest on the Reference
Rate Loans and the LIBOR Loans shall be payable on demand."
12. Article V of the Agreement is hereby amended by adding therefor the
following Section 5.2, Mandatory Prepayments:
"Section 5.2 Mandatory Prepayments.
(a) The Company covenants and agrees that if at any time the sum of
the then unpaid Revolving Loans shall exceed the Revolving Credit
commitment as then determined and computed, or if any other mandatory
prepayment event shall occur, the Company shall immediately pay over to the
Bank, without demand or notice, the amount of such excess as a mandatory
prepayment of such obligations under the Revolving Loan."
(b) The principal balance of the LIBOR Loans may not be prepaid in
whole or in part at any time. If, for any reason, a LIBOR Loan is paid
prior to the last Business Day of any Interest Period, the Company agrees
to indemnify the Bank against any loss (including any loss on redeployment
of the funds repaid), cost or expense incurred by the Bank as a result of
such prepayment.
(c) In addition, if the Company chooses not to convert any LIBOR
Loan to a Reference Rate Loan as provided in Sections 2.4 and 2.5, then
such LIBOR Loan shall be immediately due and payable on the last Business
Day of the then existing Interest Period or on such earlier date as
required by law, all without further demand, presentment, protest or notice
of any kind, all of which are hereby waived by the Company.
(d) All outstanding Revolving Loans shall be immediately due and
payable on the Revolving Note Maturity Date.
13. Article VIII to the Agreement is hereby amended by the deletion of Section
8.27 and the insertion of the following Section 8.27 in its place and
stead:
"Section 8.27 Sale of the Company's Securities. Not sell or
otherwise transfer any shares of the Company's or any Subsidiaries' or any
of Kingsway General Issuance Company's
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("Kingsway") capital stock or any options or warrants with respect thereto
(collectively, "Sales"), except in accordance with the following:
(i) proceeds of all Sales from and after the date hereof, by the
Company, a Subsidiary or of Kingsway, as the case may be, in
an aggregate amount less than or equal to Five Million Dollars
($5,000,000.00) may be retained by the Company or such
Subsidiary;
(ii) fifty percent (50%) of the proceeds of all Sales from and
after the date hereof, by the Company, a Subsidiary or of
Kingsway in an aggregate amount greater than Five Million
Dollars ($5,000,000.00) and less than or equal to Twenty
Million Dollars ($20,000,000.00) shall be immediately
transferred to Bank as a mandatory prepayment of Revolving
Loans pursuant to Section 5.2 of the Agreement;
(iii) proceeds of all Sales from and after the date hereof, by the
Company, a Subsidiary or of Kingsway in excess of Twenty
Million Dollars ($20,000,000.00) may be retained by the
Company or such Subsidiary; and
(iv) The Revolving Credit Commitment shall be reduced by the amount
of any payment required to be made to Bank as a mandatory
prepayment pursuant to the terms of this Section 8.27 (the
"Sale Prepayment").
(I) In the event the Sale Prepayment equals or exceeds
$2,500,000, (A) the Revolving Credit Commitment then in
effect (set forth in Section 2.1 hereof) shall be
reduced by the amount of Sale Prepayment, provided,
however, that the Revolving Credit Commitment (as
reduced) shall remain in effect and shall not be reduced
at the next two scheduled reductions (as set forth in
Section 2.1 hereof) to the Revolving Credit Commitment,
and (B) thereafter, on the date of each scheduled
reduction therefrom, the Revolving Credit Commitment
shall be reduced by an additional One Million Two
Hundred Fifty Thousand and no/100ths Dollars
($1,250,000.00) until the Revolving Credit Commitment
shall be reduced to $0.
(II) In the event the Sale Prepayment equals or exceeds
$1,250,000 but is less than $2,500,000, (A) the
Revolving Credit Commitment then in effect shall be
reduced by the amount of the Sale Prepayment, provided,
however, that the Revolving Credit Commitment (as
reduced) shall remain in effect and shall not be reduced
at the next scheduled reduction to the Revolving Credit
Commitment, and (B) on the next scheduled date for a
reduction in the Revolving Credit Commitment, the
Revolving Credit Commitment shall be reduced by the
difference between the amount of the Sale Prepayment and
$1,250,000, and (C) thereafter, on the date of each
scheduled reduction therefrom, the Revolving Credit
Commitment shall be reduced by an additional $1,250,000
until the Revolving Credit Commitment shall be reduced
to zero, whereupon the Revolving Loans shall be due and
payable in full.
(III) In the event the Sale Prepayment is less than $1,250,000
(A) the Revolving Credit Commitment then in effect shall
be reduced by the amount of the Sale Prepayment, (B) on
the next scheduled date for a reduction in the Revolving
Credit Commitment, the Revolving Credit Commitment shall
be reduced by the difference between the
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amount of the Sale Prepayment and $1,250,000, and (C)
thereafter, on the date of each scheduled reduction
therefrom, the Revolving Credit Commitment shall be
reduced by an additional $1,250,000 until the Revolving
Credit Commitment shall be reduced to zero whereupon the
Revolving Loans shall be due and payable in full.
(v) As an example of the provisions of this Section 8.27, if Sales
occur on June 1, 1996 in the amount of Fifteen Million and
no/100ths Dollars ($15,000,000.00), the following would occur:
(A) The Company would retain $10,000,000.00 (representing
$5,000,000.00 plus 50% of the excess between
$5,000,000.00 and $20,000,000.00);
(B) $5,000,000.00 (representing 50% of the excess between
$5,000,000.00 and $20,000,000.00) would be immediately
transferred to the Bank as a mandatory prepayment; and
(C) the Revolving Credit Commitment set forth in Section 2.1
would be adjusted as follows:
Aggregate Amount of
Revolving Loans On or Before
--------------- ------------
$10,000,000.00 01/01/97
$10,000,000.00 07/01/97
$ 8,750,000.00 01/01/98
$ 7,500,000.00 07/01/98
$ 6,250,000.00 01/01/99
$ 5,000,000.00 07/01/99
$ 3,750,000.00 01/01/00
$ 2,500,000.00 07/01/00
$ 1,250,000.00 01/01/01
$ 0.00 07/01/01"
14. The Agreement is hereby amended by deleting Section 8.21(a) and adding the
following in its respective place and stead:
"(a) Not permit or suffer the sum of (i) the consolidated
statutory surplus as required to be shown on the Statutory Financial
Statements of Intercargo Insurance Company, plus (ii) the fair
market value of any of those U.S. Treasury Bills, Permitted
Commercial Paper or certificates of deposit issued by the Bank, if
any, as are hereafter pledged to the Bank by the Company as
additional Collateral and maintained thereafter on deposit with the
Bank, to fall below Eighteen Million Dollars ($18,000,000.00) (the
"Section 8.21(a) Target") at December 31, 1995 or during the twelve
(12) months period thereafter. The Section 8.21(a) Target shall
increase by One Million Dollars ($1,000,000.00) at each fiscal year
end commencing December 31, 1996 and thereafter, provided, however,
that any such increase to the Section 8.21(a) Target shall be
postponed if, prior to such fiscal year end, Intercargo Insurance
Company shall make a
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dividend payment to the Company in the amount of One Million Dollars
($1,000,000.00) and Company shall then pay such amount to Bank as a
mandatory prepayment pursuant to Section 5.2 hereof.
15. The Agreement is hereby amended by deleting the second and third sentence
of Section 8.21(d). Section 8.21(d) shall now read as follows:
"8.21(d) Not permit or suffer the combined net written premium of
Intercargo Insurance Company for any four (4) consecutive calendar
quarterly periods to exceed 2.5 times the combined statutory surplus
of Intercargo Insurance Company as required to be shown on its
Statutory Financial Statements."
16. Section 8.21(e) of the Agreement is hereby amended by deleting same and
substituting therefore the following language:
"8.21(e) Not permit or suffer for any four (4) consecutive calendar
quarter periods, the ratio of (x) the sum of (A) with regard to
Subsidiaries which are regulated by state or province insurance
commissions, the maximum dividend or distribution which said
Subsidiaries may legally make to the Company during the applicable
fiscal period pursuant to the applicable rules, regulations,
procedures and laws of all such applicable insurance commissions of
any state or province plus (B) if such Subsidiary is not regulated
by such state or province insurance commissions ("Non-Insurance
Subsidiaries"), the Net Income of Non-Insurance Subsidiaries after
eliminating intercompany items and adding back interest,
depreciation and amortization expense plus (C) the "value of
Kingsway capital stock" (as herein defined) held by the Company as
of the end of such fiscal period, to (y) the sum of the Company's
interest and required principal payments under the Loans (including
but not limited to any required prepayments or other obligations of
Company hereunder) or pursuant to any other Indebtedness of the
Company, to be at any time less than 1.25:1. For purposes hereof,
the "value of Kingsway capital stock" shall be the closing price for
Kingsway shares on the Canadian exchange on which Kingsway shares
are traded and listed."
17. The Agreement is hereby amended by deleting Section 8.21(f).
18. Exhibit B to the Agreement, "Term Loan", is hereby deleted in its entirety.
19. In consideration of the Bank entering into this Third Amendment, upon the
execution hereof, the Company shall pay the Bank an amount equal to
Twenty-Five Thousand Dollars ($25,000.00).
20. Except as amended by this Third Amendment, all of the terms, covenants and
conditions of the Agreement are ratified, approved and confirmed and shall
remain in full force and effect. The Agreement, together with this Third
Amendment, shall constitute the Agreement between the Company and the Bank.
21. Company and Bank further acknowledge and agree that the Amended and
Restated Revolving Note evidences a rollover of indebtedness heretofore
outstanding and that Bank has not and does not, by accepting the amendments
thereto or otherwise, release any Collateral or security interest or other
encumbrance on the assets and property which Bank now holds.
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22. Upon demand by Bank therefor, the Company shall reimburse Bank for all
costs, fees and expenses incurred by Bank or for which Bank becomes
obligated, in connection with the negotiation, preparation and conclusion
of this Third Amendment, including without limitation, reasonable
attorneys' fees, costs and expenses, search fees, title insurance policy
fees, costs and expenses, filing and recording fees and all taxes payable
in connection with this Third Amendment.
23. Company hereby acknowledges, agrees and affirms that it possesses no
claims, defenses, offsets, recoupment or counterclaims of any kind or
nature against or with respect to the enforcement of the Agreement, the
Amended and Restated Note and any amendments thereto (collectively, the
"Claims"), nor does the Company now have knowledge of any facts that would
or might give rise to any Claims. If facts now exist which would or could
give rise to any Claim against or with respect to the enforcement of the
Agreement, the Revolving Note, as amended by the amendments thereto, the
Company hereby unconditionally, irrevocably and unequivocally waives and
fully releases any and all such Claims as of such Claims were the subject
of a lawsuit, adjudicated to final judgment from which no appeal would be
taken and therein dismissed with prejudice.
24. All of the provisions of the Agreement, including without limitation, the
right to declare principal and accrued interest due for any cause specified
in the Agreement, shall remain in full force and effect except as herein
expressly modified and they are hereby reaffirmed, ratified and confirmed
in their entirety and incorporated by reference as if fully set forth
herein. The Agreement and all rights and powers created thereby and
thereunder are in all respects ratified and confirmed. From and after the
date hereof, the Agreement shall be deemed to be amended and modified as
herein provided, but, except as so amended and modified, the Agreement
shall continue in full force and effect and the Agreement, the First
Amendment, the Second Amendment and this Amendment shall be read, taken and
construed as one and the same instrument.
25. THIS AMENDMENT HAS BEEN DELIVERED FOR ACCEPTANCE BY BANK IN CHICAGO,
ILLINOIS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE STATE
OF ILLINOIS. COMPANY HEREBY (i) IRREVOCABLY SUBMITS, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED IN CHICAGO, ILLINOIS, OVER ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS AMENDMENT;
(ii) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT COMPANY MAY EFFECTIVELY DO
SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT; (iii) AGREES THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW; AND (iv) TO THE EXTENT PERMITTED BY APPLICABLE LAW, AGREES NOT TO
INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST BANK OR ANY OF BANK'S
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY, CONCERNING ANY MATTER
ARISING OUT OF OR RELATING TO THIS AMENDMENT IN ANY COURT OTHER THAN ANY
STATE OR FEDERAL COURT LOCATED IN XXXX COUNTY, ILLINOIS. NOTHING IN THIS
SECTION SHALL AFFECT OR IMPAIR BANK'S RIGHT TO SERVE LEGAL PROCESS IN ANY
MANNER PERMITTED BY
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LAW OR BANK'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE COMPANY
OR COMPANY'S PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
TO THE EXTENT PERMITTED BY LAW, THE COMPANY AND BANK EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AMENDMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY
IN CONNECTION HEREWITH. THE COMPANY HEREBY EXPRESSLY ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOANS.
26. This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. To induce Bank
to enter into this Third Amendment, the Company hereby represents and
warrants to Bank that:
(a) the execution and delivery of this Amendment, and the
performance by the Company of its obligations under this Agreement and the
Amended and Restated Revolving Note are within the Company's corporate
powers, have been duly authorized by all necessary corporate action, have
received all necessary governmental approval (if any shall be required) and
do not and will not contravene or conflict with any provisions of law or
the Articles of Incorporation or corporate By-Laws or the Company or of any
agreement binding upon the Company;
(b) this Amendment, the Amended and Restated Revolving Note, and
each other instrument executed by the Company concurrently herewith is the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with their terms, except as enforcement thereof may
be subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and to the general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at laws);
(c) all of the representations and warranties of the Company made
in the Agreement are true and correct as of the date hereof, except where
such representation or warranty specifically relates to an earlier date;
and
(d) no Event of Default or Unmatured Event of Default under the
Agreement exists.
27. Concurrently herewith (and as a condition to this Amendment becoming
effective), the Company shall execute and deliver or cause to be executed
and delivered the Amended and Restated Revolving Note, in form and
substance satisfactory to Bank and its counsel.
28. The Company hereby represents that it has been represented by competent
counsel of its choice in the negotiation and execution of this Third
Amendment; that it has read and fully understood the terms hereof and
intends to be bound hereby. This Third Amendment has been thoroughly
reviewed by counsel for the Company and in the event of an ambiguity or
conflict in the terms hereof, there shall be no presumption against Bank as
the drafter hereof.
29. The parties agree that the effective date of this Third Amendment shall be
March 31, 1996.
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IN WITNESS WHEREOF, this Third Amendment has been duly executed as of the
day and year specified at the beginning hereof.
INTERCARGO CORPORATION,
a Delaware corporation
By: ____________________________
Its: _________________________
LASALLE NATIONAL BANK
By: ____________________________
Its:__________________________
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