1
EXHIBIT 2
AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT (this "Amendment") is entered into
effective the 31st day of July, 1997 (the "Effective Date"), by and among TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, a national banking association ("Lender"),
with its principal office at 000 X. Xxxx, Xx Xxxx, Xxxxx 00000, XXXXX OF XXXX
L.P., a Texas limited partnership, with its principal office at 0000 Xxxxxx
Xxxxxx, Xx Xxxx, Xxxxx 00000 ("Borrower"), and XXXXX OF XXXX LIMITED, a Bermuda
corporation, with its principal office at 0000 Xxxxxx Xxxxxx, Xx Xxxx, Xxxxx
00000, HOT NEVADA, INC., a Nevada corporation, with its principal office at 0000
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxx, Xxxxxx 00000, XXXXX OF XXXX LIMITED, a
Barbados corporation, with its principal office at P. X. Xxx 00, Xxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxx, West Indies, XXXXX OF XXXX NEVADA CORPORATION, a Nevada
corporation, with its principal office at 0000 Xxxxxx Xxxxxx, Xx Xxxx, Xxxxx
00000, and XXXXX OF XXXX TEXAS CORPORATION, a Texas corporation, with its
principal office at 0000 Xxxxxx Xxxxxx, Xx Xxxx, Xxxxx 00000 (collectively
"Guarantors") for the purpose of amending and supplementing that one certain
Loan Agreement dated as of December 31, 1996, among Lender, Borrower, XXXXX OF
XXXX LIMITED and XXXXX OF XXXX TEXAS CORPORATION (the "Loan Agreement").
Capitalized terms used, but not otherwise defined, in this Amendment shall have
the meanings ascribed to them in the Loan Agreement.
WHEREAS, Borrower has requested Lender to (i) increase the amount that
may be advanced under the terms of the Revolving Credit Loan to TEN MILLION AND
NO/100 DOLLARS ($10,000,000.00), and (ii) extend the maturity of the Note
evidencing the Revolving Credit Loan to July 31, 1999; all in accordance with
the terms of this Amendment, which Lender is willing to do upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lender, Borrower and Guarantors
hereby agree as follows:
1. INCREASE OF MAXIMUM LOAN TOTAL. From the effective date of this
Amendment the amount available under the Revolving Credit Loan shall be
increased from FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) to TEN MILLION
AND NO/100 DOLLARS ($10,000,000.00), to be evidenced by a Revolving Credit Loan
Note dated effective July 31, 1997, executed by Borrower. Beginning July 31,
1997, and continuing until fully paid, the Maximum Loan Total available under
the Note shall be in the amount of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00). There is no current outstanding principal balance on the Note.
2. COMMITMENT PERIOD. The Commitment Period is hereby extended to July
31, 1999; subject, however, to the payment of the Commitment Fee described
below.
3. LETTERS OF CREDIT. Section 2.01 of the Loan Agreement is amended to
read as follows:
2
2.01.1 Letters of Credit. In the event that
during the Commitment Period Lender shall agree to issue on Borrower's
account letters of credit ("Letters of Credit"), as defined in Chapter
5 of the Texas Uniform Commercial Code - Letters of Credit, then
Borrower agrees as aforesaid that (i) the available principal balance
of the Revolving Credit Loan shall be reduced by the aggregate amount
of all Letters of Credit outstanding from time to time; (ii)
outstanding Letters of Credit shall never exceed in the aggregate at
any time the sum of $3,000,000.00, and (iii) no Letter of Credit shall
have an expiry date later than July 31, 1999.
Borrower agrees to pay to Lender a fee equal to one-half of
one percent (.5%) per annum of the face amount for issuing Letters of
Credit, and Borrower further agrees that should Lender be required to
fund all or any part of any Letter of Credit on behalf of Borrower, any
such funding shall be simultaneously charged to the Revolving Credit
Loan, subject to all of the terms and conditions of this Agreement.
4. RENEWAL OF REVOLVING CREDIT LOAN NOTE. Section 2.02 of the Loan
Agreement is amended to read as follows:
2.02 Revolving Credit Loan Note. The Revolving Credit
Loan shall be evidenced by the Revolving Credit Loan Note in the
principal sum of $10,000,000.00, executed and delivered by Borrower,
payable to the order of Lender, in the form appended hereto as Exhibit
"A". The Termination Date of the Revolving Credit Loan Note shall be
July 31, 1999.
Loans made by Lender under the terms of the Revolving Credit
Loan Note shall be two (2) week, one (1) month, two (2) month, three
(3) month, or six (6) month Eurodollar Loans.
Borrower shall pay interest on each Alternate Base Rate Loan
for the Interest Period with respect thereto at a rate per annum equal
to the lesser of (i) the Alternate Base Rate for such Interest Period,
or (ii) the Highest Lawful Rate, which interest shall be due and
payable quarterly, beginning October 31, 1997, and continuing on the
last day of each third month thereafter until Termination Date.
Borrower shall pay interest on each Eurodollar Loan for the
Interest Period with respect thereto on the unpaid principal amount
thereof at a rate per annum equal to the lesser of (i) the Eurodollar
Rate plus one-half of one percent (.50%) (the "Effective Eurodollar
Rate"), or (ii) the Highest Lawful Rate, which interest shall be due
and payable quarterly, beginning October 31, 1997, and continuing on
the last day of each third month thereafter until Termination Date.
-2-
3
If not sooner paid, the entire unpaid principal of, and all
accrued, unpaid interest on, the Revolving Credit Loan Note shall be
due and payable on July 31, 1999.
5. CONSOLIDATED NET WORTH. Section 8 of the Loan Agreement is amended
to read as follows:
8.01 Consolidated Net Worth. XXXXX OF XXXX LIMITED
("Limited") will not permit Consolidated Net Worth (i) at any time
during the period commencing on May 31, 1997, and ending on July 31,
1997 to be less than $110,000,000, (ii) at any time during any fiscal
quarter of Limited thereafter to be less than the minimum Consolidated
Net Worth required by this Section at the end of the immediately
preceding fiscal quarter of Limited plus the greater of zero or 40% of
Consolidated Net Earnings for the immediately preceding fiscal quarter
of Limited.
6. COMMITMENT FEE. Borrower agrees to pay to Lender a Commitment Fee of
$12,500.00 on or before July 31, 1997, in consideration of Lender's execution of
this Amendment, and at the option of Borrower an additional $12,500.00 on or
before August 31, 1998; provided, that if the payment due on or before August
31, 1998 is not paid, the Commitment shall terminate on that date and the
Revolving Credit Loan Note shall be immediately due and payable.
7. LIMITATION ON USE. The proceeds of the Revolving Credit Loan Note
shall not be used to acquire the stock or assets of any Person unless there is a
firm commitment from another lender to provide the funds to pay off Lender
within thirty (30) days of the draw under the Revolving Credit Loan Note.
8. CONTINUED VALIDITY. Except as expressly provided in this Amendment,
all terms, conditions, representations, warranties, and covenants contained in
the Loan Agreement, shall remain in full force and effect, and are hereby
confirmed and acknowledged by Borrower.
9. COUNTERPARTS. This Amendment may be executed in several
counterparts, each of which shall be fully effective as an original, and all of
which together shall constitute one and the same instrument.
10. DISCLOSURE. As of the date hereof, there is no fact known to
Borrower which Borrower has not disclosed to Lender in writing, that materially
and adversely affects or in the future may (as far as Borrower can now foresee)
materially and adversely affect the business, operations, properties, prospects
or conditions, financial or otherwise, of Borrower or any of its affiliates.
Borrower shall immediately notify the Lender in writing in the event any such
fact or facts become known during the term of the Loan Agreement, as herein
amended.
11. CONDITIONS. This Amendment shall not be effective unless and until
the Lender
-3-
4
shall have received this Amendment and all such other agreements, documents or
instruments necessary or required by Lender in connection with the transactions
contemplated by this Amendment, including the Note Modification Agreement, all
duly executed.
12. NO DEFAULT. Borrower represents and warrants to Lender (after
giving effect to the terms and conditions of this Amendment), that there exists
on this day no Event of Default, as that term is defined in the Loan Agreement,
and no event which, with notice or lapse of time or both, would become an Event
of Default.
13. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender that all of the representations and warranties set forth in
the Loan Agreement (after giving effect to the terms and conditions of this
Amendment), are true and correct on and as of the date of this Amendment as if
made on and as of such date.
14. EVENT OF DEFAULT. It is understood and agreed by Borrower that an
Event of Default shall exist if any representation, warranty or covenant made or
deemed made by Borrower in this Amendment, in the Loan Agreement (including all
amendments and supplements thereto), or in any document or exhibit attached
thereto or referred to therein, shall prove to have been incorrect in any
material respect on or as of the date made or deemed made.
15. CONSTRUCTION. This Amendment and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with and
governed by, the laws of the State of Texas, except as federal law may apply.
16. BINDING EFFECT. This Amendment shall be binding upon and enure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns; provided, however, that Borrower shall not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Lender.
17. OTHER TERMS. Except as expressly provided herein, all of the terms
and conditions of the Loan Agreement and the Guaranty (collectively, the "Loan
Documents"), and any and all other documents described in or executed in
connection with the Loan Documents shall continue in full force and effect and
are hereby reaffirmed. It is expressly understood and agreed that if there are
inconsistencies between or among the Loan Documents, the terms of the Loan
Agreement, as amended, shall prevail.
THIS AMENDMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
-4-
5
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
XXXXX OF XXXX L.P., a
Texas limited partnership
By: /s/ Xxx X. Xxxxx
--------------------------------------
Xxx X. Xxxxx
Chief Financial Officer
BORROWER
XXXXX OF XXXX LIMITED, a Bermuda
corporation
By: /s/ Xxx X. Xxxxx
--------------------------------------
Xxx X. Xxxxx
Chief Financial Officer
XXXXX OF XXXX LIMITED
a Barbados corporation
By: /s/ Xxx X. Xxxxx
--------------------------------------
Xxx X. Xxxxx
Chief Financial Officer/Vice President
HOT NEVADA, INC. a Nevada corporation
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Xxxx X. Xxxxxxxxxx
President
-5-
6
XXXXX OF XXXX NEVADA CORPORATION
a Nevada corporation
By: /s/ Xxx X. Xxxxx
--------------------------------------
Xxx X. Xxxxx
Chief Financial Officer
XXXXX OF XXXX TEXAS CORPORATION
a Texas corporation
By: /s/ Xxx X. Xxxxx
--------------------------------------
Xxx X. Xxxxx
Chief Financial Officer
GUARANTORS
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
Senior Vice President
LENDER
-6-
