EXHIBIT 1
XXXXX X. XXXXX
c/o Chase Enterprises
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
December 24, 1997
Xxxxx X. Xxxxx
c/x Xxxxx Enterprises
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: LOAN OF COMMON STOCK OF ACCEL INTERNATIONAL CORPORATION
This letter will set forth and confirm the agreement entered into between
Xxxxx X. Xxxxx ("Borrower") and Xxxxx X. Xxxxx ("Lender") regarding shares
of common stock of ACCEL International Corporation (the "Company").
1. Xxxxxx xxxxxx confirms that it has loaned to Borrower 1,000,000
shares of the common stock, no par value, of the Company ("Borrowed
Securities").
2. Until this Agreement is terminated, Borrower shall have the full
use of the Borrowed Securities including the right to sell, pledge or
otherwise transfer or encumber such securities to others.
3. Upon the termination of this Agreement, Borrower shall deliver to
Lender securities identical in kind and amount to the Borrowed Securities
and including all dividends and distributions in the form of stock, rights,
warrants or other securities which the Company has made during the term of
this Agreement with respect to the Borrowed Securities. During the term of
this Agreement and from time to time, but in no event later than ten (10)
days after the date of any distributions, Borrower shall pay over to Lender
in cash the amount of any cash dividends or distributions made by the
Company respecting the Borrowed Securities. In the event of a
recapitalization, stock split or other exchange by the Company with respect
to the Borrowed Securities, the exchanged or newly issued shares shall be
deemed identical in kind to the Borrowed Securities.
4. Xxxxxxxx agrees to pay Xxxxxx a service fee for the use of the
Borrowed Securities. The service fee shall be six percent (6%) per annum
of the average monthly market value of the Borrowed Securities pro rated
over the number of days this Agreement is in effect. Such fee shall be due
and payable Borrowed Securities pro rated over the number of days this
Agreement is in effect. Such feel shall be due and payable quarterly on
the last day of each March, June, September and December for which this
Agreement is in effect.
5. Upon demand, Borrower will secure its obligations under this
agreement by delivering to Lender marketable securities or other property
having a market value of at least one hundred and five percent (105%) of
the market value of the Borrowed Securities. Such transfer of property as
security shall be accompanied by such instruments and documents as shall be
adequate to provide Lender with a good and valid security interest therein.
The said security interest shall give Borrower the right to substitute
collateral. Except in the event of a default by Borrower, Lender shall not
have any right to sell or otherwise dispose of the collateral.
6. Xxxxxx and Xxxxxxxx agree that the loan of the Borrowed
Securities shall not reduce Lender's risk of loss or opportunity for gain
respecting the Borrowed Securities.
7. Borrower and Xxxxxx agree that they shall maintain their
respective books and records with respect to the Borrowed Securities to
reflect the transfer of said securities under this Agreement; to record any
obligation that may arise with respect to any dividends or distributions
respecting the Borrowed Securities which may be made by the Company; to
record the transfer of any property or cash in satisfaction of any dividend
or distribution obligation; and to record the transfer of stock in whole or
partial satisfaction of the obligation respecting return of the Borrowed
Securities. Xxxxxxxx and Xxxxxx further agree that they will, upon
reasonable request, confirm to the other or any auditors of the other their
respective obligations with respect to the Borrowed Securities. The
obligation hereunder regarding the records of the parties shall also apply
with respect to any collateral which may be transferred to secure
Xxxxxxxx's obligation.
8. Unless otherwise sooner terminated as herein provided, this
Agreement shall terminate on December 31, 2001. Borrower reserves the
right to terminate this Agreement by return of the Borrowed Securities upon
two (2) days' notice to Lender. Such right of termination shall be
exercisable in whole or in part. Lender reserves the right to terminate
this Agreement on written notice to Borrower of five (5) business days at
which time Borrower shall fulfill its obligations to Lender as provided in
paragraph 3 hereof.
9. This Agreement shall be binding upon the respective successors
and assigns of Xxxxxx and Xxxxxxxx.
Please confirm that the foregoing sets forth our understanding
regarding the Borrowed Securities by signature below.
Very truly yours,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
THE FOREGOING IS XXXXXX
CONFIRMED AND AGREED TO:
/S/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
