EXHIBIT 10.31
MODIFICATION OF TERM LOAN AGREEMENT
THIS MODIFICATION OF TERM LOAN AGREEMENT, made and
entered into as of ______________
___, 1997 by and between MERIDIAN INSURANCE GROUP, INC.
(the "Borrower"), and NBD BANK, N.A. (the "Bank");
WITNESSETH:
WHEREAS, the Borrower and the Bank have entered into a
certain Term Loan Agreement dated July 29, 1996 (the
"Agreement"); and
WHEREAS, pursuant to the terms of the Agreement, the
Borrower has executed and delivered to the Bank a certain
Business Credit Note in the amount of $12,000,000.00 and
dated July 29, 1996; and
WHEREAS, the Borrower has requested and the Bank has
agreed to a modification of the Negative Covenants set out
in Subsection 6.2 of the Agreement;
NOW THEREFORE, in consideration of the mutual covenants,
conditions, provisions and agreements contained herein, the
parties hereto agree as follows:
1. Subsections A, C and D of section 6.2 are replaced
as follows:
A. Risk Based Capital. Permit the ratio of
the combined total adjusted capital of Meridian
Mutual Insurance Company and its Affiliates, to
its company action level to be less than 175.0%,
as calculated at the end of each fiscal year.
C. Total Debt Ratio. Permit the ratio of
(I) the total liabilities for borrowed money and
capitalized leases of Meridian Mutual Insurance
Company and its Affiliates plus Meridian Insurance
Group, to (ii) the sum of combined policy holders'
surplus and liabilities for borrowed money and
capitalized leases of Meridian Mutual Insurance
Company and its Affiliates, other than Citizens
Security Mutual, to be greater than .20 to 1.00.
D. Policyholders' Surplus. Permit the
policyholders' surplus of Meridian Mutual
Insurance Company and its Affiliates to be less
than $105,000,000, which minimum amount will
increase at each fiscal year end beginning
December 31, 1997 by 25.0% of the combined
statutory net income of Meridian Mutual Insurance
Company and its Affiliates.
2. All other terms, conditions, provisions,
representations and warranties set forth in the Agreement
and any documents related thereto (the "Loan Documents"),
not specifically relating to those items explicitly modified
by or otherwise disclosed in the modification shall remain
unchanged and shall continue in full force and effect. This
Modification shall, whenever possible, be construed in a
manner consistent with Loan Documents; provided; however, in
the event of any irreconcilable inconsistency between the
terms of this Modification and the terms of the Loan
Documents, the terms of this modification shall control.
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IN WITNESS WHEREOF, Borrower and Bank have executed this
Modification of Term Loan Agreement effective as of
__________________, 1997.
MERIDIAN INSURANCE GROUP INC.
By: ___________________________________
___________________________________
Printed Name - Title
NBD BANK, N.A.
By: ___________________________________
___________________________________
Printed Name - Title
