Document:

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                                                                   EXHIBIT 10.1

                                                     As of June 30, 2000

Selective Insurance Company of America
Selective Insurance Group, Inc.
40 Wantage Avenue
Branchville, NJ  07890-1000

     RE:  Loan Facility

Ladies and Gentlemen:

     State Street Bank and Trust Company (the "Bank") has made available to
Selective Insurance Company of America, a corporation organized under the laws
of New Jersey (the "Company") and Selective Insurance Group, Inc., a corporation
organized under the laws of New Jersey (the "Parent") (collectively, the Company
and the Parent are hereinafter referred to as the "Borrower") an aggregate
$40,000,000 revolving line of credit (the "Line of Credit") as described in a
letter agreement dated March 3, 1997 (as amended, the "Letter Agreement"). All
obligations of the Borrower arising under the Line of Credit are evidenced by a
promissory note in the original principal amount of $25,000,000 dated March 3,
1997 made by the Borrower to the order of the Bank as increased to $40,000,000
by a letter amendment dated June 17, 1999 (as amended, the "Note").

     The Borrower has requested, and the Bank has agreed pursuant to the terms
hereof, to decrease the line of credit and to extend the Revolving Maturity Date
as defined in the Letter Agreement. Therefore, for good and valuable
consideration, the receipt of which is hereby acknowledged, the Borrower and the
Bank hereby agree as follows:

      I. Amendments to Letter Agreement

      1. Paragraph 1 of the Letter Agreement is hereby amended by deleting the
following therefrom: "June 30, 2000" and substituting the following therefor:
"June 29, 2001". All references to "Revolving Maturity Date" in the Letter
Agreement or any related document shall be deemed to refer to June 29, 2001.

      2. The Letter Agreement is hereby amended by deleting the following
wherever it may appear: "$40,000,000" and substituting, in each instance, the
following therefor: "$25,000,000".
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Selective Insurance Company
of America
Selective Insurance Group, Inc.
As of June 30, 2000
Page 2

      II. Amendments to Note

      The Note is hereby amended by deleting the following therefrom:
"$40,000,000" and "Forty Million Dollars ($40,000,000)" and substituting the
following, respectively, therefor: "$25,000,000" and "Twenty Five Million
Dollars ($25,000,000)".

      III. Miscellaneous

      1. As amended hereby, all terms and conditions of the Letter Agreement and
Note remain in full force and effect and are ratified and affirmed as of the
date hereof and extended to give effect to the terms hereof.

      2. The Borrower represents to the Bank that no default or Event of Default
has occurred under the Letter Agreement or Note, and further that if the
proceeds of any Revolving Loan are utilized to finance the purchase of the stock
of the Parent, such use will be in compliance with Regulations U and X of the
Board of Governors of the Federal Reserve System.

      3. This letter agreement shall constitute an agreement executed under seal
to be governed by the laws of The Commonwealth of Massachusetts.

                                    Sincerely,

                                    STATE STREET BANK AND TRUST COMPANY

                                    By:  /s/ Edward M. Anderson
                                         ----------------------

                                    Title:   Vice President
                                             ------------------
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Selective Insurance Company
of America
Selective Insurance Group, Inc.
As of June 30, 2000
Page 3

Acknowledged and accepted:

SELECTIVE INSURANCE COMPANY OF AMERICA

By:  /s/ Dale A. Thatcher
     -------------------------------------

Title: Senior Vice President, Chief Financial Officer
       -----------------------------------------------

By:  /s/ Thornton R. Land
     -------------------------------------

Title: Executive Vice President, General Counsel
       -----------------------------------------------

SELECTIVE INSURANCE GROUP, INC.

By:  /s/ Dale A. Thatcher
     -------------------------------------

Title: Senior Vice President, Chief Financial Officer
       -----------------------------------------------

By:  /s/ Thornton R. Land
     -------------------------------------

Title: Executive Vice President, General Counsel
       -----------------------------------------------<PAGE>   1
                                                                    EXHIBIT 10.2

                                                as of July 31, 2000

Selective Insurance Company of America
Selective Insurance Group, Inc.
40 Wantage Avenue
Branchville, New Jersey  07890-1000

Re:   Letter Loan Agreement dated June 30, 1997, as heretofore modified and
      extended (collectively, the "Loan Agreement")

Gentlemen:

      This is to confirm our approval of your request for an extension through
July 31, 2001 of the expiration date of the Revolving Line of Credit provided
for in the Loan Agreement. Accordingly, we have agreed to modify the definition
of Revolving Maturity Date to provide that July 31, 2001 is the Revolving
Maturity Date. Our approval is subject to your agreement to the following:

            A. The Loan Agreement is hereby deemed modified so as to provide
that the maximum outstanding at any one time under the Revolving Line of Credit
shall not exceed $15,000,000.00, in the aggregate.

            B. Paragraphs 1 and 2 of the Loan Agreement are hereby deemed
amended and restated in their entirety as follows:

                  1. Term. The Revolving Line of Credit shall commence on the
                  date hereof and expire on July 31, 2001 (the "Revolving
                  Maturity Date"), unless extended by mutual agreement.

                  2. Notice and Manner of Borrowings. Subject to the terms and
                  conditions hereof, and upon request by either Borrower, the
                  Bank agrees to make revolving loans to such Borrower provided
                  for herein (each, a "Revolving Loan") not to exceed
                  $15,000,000.00 in aggregate of all outstanding Revolving Loans
                  to both Borrowers at any time.

            C. Paragraph 4 of the Loan Agreement is hereby deemed amended and
restated in its entirety as follows:

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4. Interest Rate. Principal on each outstanding Revolving Loan shall bear
interest as selected by the applicable Borrower at a floating rate equal to the
Adjusted Libor Rate plus 28 basis points per annum. Revolving Loans may be made
for interest periods of 1 or 3 months, the foregoing interest periods shall be
acceptable to the Bank and adjusted for month-end, weekend and holiday periods.
An interest period shall commence on the first day of each month and end one (1)
or three (3) months thereafter as selected by the Borrower. All borrowings
hereunder during each interest period shall be at the Adjusted Libor Rate as
determined at the beginning of the Interest Period, plus 28 basis points.
Interest on each Revolving Loan shall be calculated on the basis of a 360-day
year for the actual number of days elapsed. Interest shall be payable monthly in
arrears on the first day of each month. All accrued and unpaid interest on all
Revolving Loans shall be due and payable on the same day when principal is
payable, whether upon acceleration following an Event of Default as defined
herein or on the Revolving Maturity Date. Revolving Loans may be prepaid without
penalty. Revolving Loans which are repaid may be borrowed subject to the terms
hereof.

            D. Paragraph 6 of the Loan Agreement is hereby deemed amended and
restated in its entirety as follows:

                  6. Commitment Fee. For the period from the date hereof through
                  the Revolving Maturity Date, the Borrower will pay to the Bank
                  a commitment fee equal to 12 basis points per annum on the
                  maximum amount permitted to be outstanding under the Revolving
                  Credit Line of Credit (regardless of whether such amount is
                  actually outstanding), which shall be payable quarterly in
                  arrears commencing September 30, 2000 and on any date on which
                  the commitment hereunder is terminated by the Borrower.

            E. The last paragraph of Paragraph 8(f) the Loan Agreement is hereby
deemed amended and restated in its entirety as follows:

                  "All capitalized terms used in said Addendum shall have the
                  meaning ascribed to such term in the $54,000,000.00, 8.77%,
                  Senior Notes dated August 1, 1994 issued by the Parent, as
                  originally issued, and as may be modified thereafter with the
                  consent of the Bank."

            F. Simultaneously with the execution and delivery of this Agreement,
and as a condition precedent to the extension of the Revolving Credit Loan, the
Borrower shall execute and deliver to the Bank the Amended and Restated
Promissory Notes (the "Notes") in the forms attached hereto as Exhibits A-1 and
A-2, to evidence the revised Revolving Line of Credit.

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      Our approval shall not constitute a waiver of any Events of Default, if
any so exist, or any future violation of any provisions of the Loan Agreement or
any other Loan Documents.

      Capitalized terms not defined herein but defined in the Loan Agreement
shall have the same meaning ascribed to such terms in the Loan Agreement. Your
execution shall also act as your representation that the execution of this
Agreement has been authorized by all required corporate action, that this
Agreement constitutes the valid and binding obligations of the Borrower, is
enforceable in accordance with its terms, that no Event of Default exists and
that no material adverse change of the Borrower has occurred.

      Except as herein set forth, the Loan Agreement and all other Loan
Documents shall remain in full force and effect. Our agreement as aforesaid is
subject to your written agreement with the terms hereof by signing and returning
a copy hereof where so indicated below.

                                          Summit Bank

                                          By:  /s/ Gary W. Tyrell
                                               -------------------
                                          Name: Gary W. Tyrell
                                                ------------------
                                          Title: Director
                                                 -----------------------

Agreed to:

Selective Insurance Company               Selective Insurance Company
of America                                of America

By: /s/ Gregory E. Murphy                  By: /s/ Dale A. Thatcher
    --------------------------------          ---------------------------------
Name: Gregory E. Murphy                    Name: Dale A. Thatcher
      ------------------------------             ------------------------------
Title: Chairman, President and CEO         Title: Senior Vice President and CFO
       -----------------------------              -----------------------------

Selective Insurance Group, Inc.            Selective Insurance Group, Inc.

By: /s/ Dale A. Thatcher                   By: /s/ Gregory E. Murphy
    --------------------------------           --------------------------------
Name: Dale A. Thatcher                     Name: Gregory E. Murphy
      ------------------------------             ------------------------------
Title: Senior Vice President and CFO       Title: Chairman, President and CEO
       -----------------------------              -----------------------------

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