EXHIBIT 1
XXXXX X. XXXXX
C/O Chase Enterprises, Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
December 15, 1995
Insurance Holdings Limited Partnership
C/O Chase 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 Insurance Holdings Limited Partnership ("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 335,000
shares of the common stock, par value, $.10 per share, 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 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 the 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
default by Xxxxxxxx, 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, 1998. 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 apart. 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:
Chase Insurance Corporation
/S/ XXXXXX XXXXX XXXXXXXX
Xxxxxx Xxxxx Xxxxxxxx
Executive Vice President
