EXHIBIT 10.5
FIRST AMENDMENT and WAIVER dated as of August 14,
1996 to the LOAN AGREEMENT dated as of March 4,
1996 (the "Agreement"), among HOME STATE HOLDINGS,
INC. ("Holdings"), a Delaware corporation, TOWER
HILL, INC., ("Tower"), a Delaware corporation
(Holdings and Tower collectively the "Credit
Parties"), THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank) ("Chase"), a New York
banking corporation, and EUROPEAN AMERICAN BANK
("EAB"), a New York banking corporation (Chase and
EAB individually a "Bank" and collectively, the
"Banks"), and THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank), as agent for the Banks
(in such capacity, the "Agent")
WHEREAS, the Credit Parties, the Agent and the Banks desire to waive and amend
the Agreement in certain respects;
WHEREAS, the Agent and the Banks have agreed, subject to the terms and
conditions of this FIRST AMENDMENT and WAIVER, to waive and amend the Agreement
to the extent set forth below;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. Waiver of Article V, COVENANTS OF THE BORROWER, Section 5.02, Negative
Covenants, (k) Losses.
Compliance with Section 5.02(k)(1) of the Agreement is hereby waived to
permit the Credit Parties to incur a net consolidated loss for the fiscal
quarter ended June 30, 1996 in an amount not in excess of $5,500,000 in the
aggregate provided, however, that such loss arises solely as a result of a
reserve taken in the fiscal quarter ended June 30, 1996 in the amount of
$11,300,000.
2. Amendment to Article V, COVENANTS OF THE BORROWER, Section 5.02, Negative
Covenants, (k) Losses.
Section 5.02(k) of the Agreement is hereby amended by deleting it in its
entirety and substituting the following therefor:
"Incur (i) a net consolidated loss in excess of $1,500,000 in the aggregate
for any two (2) fiscal quarters in any four (4) quarter period (excluding,
for purposes of calculating compliance with this covenant, the fiscal
quarter ended June 30, 1996 from any four (4) quarter period and including,
in substitution thereof, the fiscal quarter next preceding the
first quarter in such four quarter period), or (ii) a net consolidated loss
in any amount for any fiscal year (other than the fiscal year ending
December 31, 1996, in which the Credit Parties may incur a net consolidated
loss not in excess of $2,500,000)."
This FIRST AMENDMENT and WAIVER shall be construed and enforced in accordance
with the laws of the State of New York.
All terms used herein shall have the meaning as in the Agreement unless
specifically defined herein.
Except as expressly amended or waived hereby, the Agreement shall remain in full
force and effect in accordance with the original terms thereof. The FIRST
AMENDMENT and WAIVER herein contained is limited specifically to the matters set
forth above and does not constitute directly or by implication an amendment or
waiver of any other provisions of the Agreement or any default which may occur
or may have occurred under the Agreement.
The Credit Parties hereby represent and warrant that, after giving effect to
this FIRST AMENDMENT and WAIVER, no Event of Default or Default exists under the
Agreement or any other related document.
Please be advised that should there be a need for further amendments and waivers
with respect to the Agreement, those requests will be evaluated by the Agent and
the Banks when formally requested in writing by the Credit Parties.
This FIRST AMENDMENT and WAIVER may be executed in one or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one FIRST AMENDMENT and WAIVER. This FIRST
AMENDMENT and WAIVER shall become effective as of the date first above written
upon the receipt by the Agent of duly executed counterparts of the FIRST
AMENDMENT and WAIVER, bearing the signatures of each of the parties hereto.
IN WITNESS WHEREOF, the Credit Parties, the Agent and the Banks have caused this
FIRST AMENDMENT and WAIVER to be duly executed by their duly authorized
officers, all as of the day and year first above written.
HOME STATE HOLDINGS, INC.
By:_________________________________
Name:
Title
By:_________________________________
Name:
Title
2
TOWER HILL, INC.
By:_________________________________
Name:
Title
By:_________________________________
Name:
Title
THE CHASE MANHATTAN BANK
(formerly known as Chemical), as Agent
and a Bank
By:_________________________________
Name:
Title
By:_________________________________
Name:
Title
EUROPEAN AMERICAN BANK
By:_________________________________
Name:
Title
By:_________________________________
Name:
Title
3
CONSENT
The undersigned, as Guarantors of the obligations of Home State Holdings, Inc.
and Tower Hill, Inc., hereby consent to the execution and delivery by Home State
Holdings, Inc. and Tower Hill, Inc. of this FIRST AMENDMENT AND WAIVER and
hereby confirm that they remain fully bound by the terms of the General Guaranty
dated March 4, 1996 to which they are a party.
HSIM L.L.C. ASPEN INTERMEDIARIES, INC.
By:_____________________________ By:_____________________________
Name: Name:
Title: Title:
By:_____________________________ By:_____________________________
Name: Name:
Title: Title:
ASPEN INTERMEDIARIES L.L.C.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
4
