EXHIBIT 10.26
FIFTH AMENDMENT TO LOAN AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is entered
into effective the 31st day of August, 2001, by and among THE CHASE MANHATTAN
BANK, successor by merger to CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, f/k/a
TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("Lender"), with its office at 000 X.
Xxxx, Xx Xxxx, Xxxxx 00000, XXXXX OF XXXX L.P., a Texas limited partnership,
with its principal office at 0 Xxxxx xx Xxxx Xxxxx, Xx Xxxx, Xxxxx 00000 and
XXXXX OF XXXX LIMITED, a Barbados corporation, with its principal office at
P.O. Box 836E, Whitepark House, White Park Road, Bridgetown, Barbados, West
Indies (collectively, "Borrower"), XXXXX OF XXXX LIMITED, a Bermuda corporation
("Limited"), with its principal office at 1 Xxxxx of Xxxx Xxxxx, 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 NEVADA
CORPORATION, a Nevada corporation, with its principal office at 1 Xxxxx of Xxxx
Xxxxx, Xx Xxxx, Xxxxx 00000, and XXXXX OF XXXX TEXAS CORPORATION, a Texas
corporation, with its principal office at 1 Xxxxx of Xxxx Xxxxx, 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,
XXXXX OF XXXX L.P., Limited and XXXXX OF XXXX TEXAS CORPORATION, as amended by
an Amendment to Loan Agreement dated effective July 31, 1997, by a Second
Amendment to Loan Agreement dated effective July 31, 1998, by a Third Amendment
to Loan Agreement dated effective July 31, 2000, and by a Fourth Amendment to
Loan Agreement dated effective July 31, 2001 (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) extend the period in
which Borrower may request loans under the reinstated committed revolving line
of credit, (ii) increase the amount available under the Revolving Credit Loan,
(iii) increase the sub-limit for issuance of letters of credit, and (iv)
extend to the Borrower an uncommitted guidance line of credit, 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 TEN MILLION DOLLARS ($10,000,000) to FIFTEEN MILLION DOLLARS
($15,000,000), to be evidenced by a Revolving Credit Loan Note dated effective
August 31, 2001, executed by Borrower. Beginning August 31, 2001, and continuing
until fully paid, the Maximum Loan Total available under the Note shall be in
the amount of FIFTEEN MILLION DOLLARS ($15,000,000). The current outstanding
principal balance of the Note as of the effective date of this Amendment is
$10,000,000.
2. Commitment Period. The Commitment Period is hereby extended to
August 31, 2003.
3. Consolidated EBITDA Definition. The definition of
"Consolidated EBITDA" as set forth in Section 5 of the Third Amendment dated
effective July 31, 2000, is hereby amended to read as follows:
Consolidated EBITDA. The term "Consolidated EBITDA" shall mean
for any period the sum of Consolidated Net Earnings (as defined in the
Loan Agreement), plus the total of
(a) non-cash expenses, such as depreciation and amortization, (b)
interest expense, and (c) federal income tax expenses, for Limited and
its Subsidiaries, all determined in accordance with generally accepted
accounting principles. Consolidated EBITDA shall further be increased
by any write-off of goodwill mandated by generally accepted accounting
principles.
4. LETTERS OF CREDIT. Section 2.01 of the Loan Agreement is
amended to read as follows:
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
$7,000,000.00, and (iii) no Letter of Credit shall have an expiry date
later than November 30, 2003.
Borrower agrees to pay to Lender a fee for issuing Letters of
Credit equal to the face amount of the Letter of Credit times one-half
of one percent (0.50%) per annum (prorated based on the term of the
Letter of Credit to be issued), 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.
5. 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 $15,000,000, executed and delivered by Borrower,
payable to the order of Lender, in form and substance acceptable to
Lender. The Termination Date of the Revolving Credit Loan Note shall be
August 31, 2003.
6. TWO-WEEK INTEREST PERIOD RATE. Two-week Interest Period Loans
shall no longer be made at an interest rate equal to the Effective Libo Rate as
defined in the Revolving Credit Loan Note, but shall be made instead at an
interest rate based on the Lender's money market rate for similar amounts, plus
the following margin, which is dependent upon the Borrower's Consolidated
Indebtedness to Consolidated EBITDA Ratio:
CONSOLIDATED INDEBTEDNESS TO
CONSOLIDATED EBITDA RATIO APPLICABLE MARGIN
---------------------------- -----------------
Under 1.00x 0.97%
1.00x to 1.25x 0.97%
1.26x to 1.50x 0.97%
1.51x to 1.75x 1.25%
1.76x to 2.00x 1.25%
2.01x to 2.25x 1.52%
2.26x to 2.50x 1.52%
2.51x to 2.75x 2.02%
Greater than 2.75x 2.02%
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7. UNCOMMITTED GUIDANCE LINE. Subject to the terms and conditions of
the Loan Agreement, as amended, the Lender hereby establishes during the period
coinciding with the Commitment Period (for the purposes of this Section 5 and
Section 6 below, the "Advance Period"), an uncommitted line of credit (the
"Uncommitted Line of Credit") in favor of the Borrower, pursuant to which the
Lender may, in its sole discretion, from time to time make advances (an
"Advance" or "Advances") in an aggregate amount of TEN MILLION DOLLARS
($10,000,000) (the "Uncommitted Line Amount").
8. ADVANCES. In order to obtain an Advance from the Lender under the
Uncommitted Line of Credit, the Borrower shall deliver to the Lender a written
borrowing request (a "Borrowing Request") at least three (but not more than
fifteen) Business Days prior to the date on which the Advance is to be made,
specifying (i) the date (which shall be a Business Day) on which the Advance is
to be made, (ii) the amount thereof, (iii) the Interest Period for such Loan,
and (iv) the Maturity Date of such Loan (which must be on or before August 31,
2003). The Lender shall notify the Borrower in writing as to whether a Borrowing
Request is approved. Upon fulfillment of the applicable conditions set forth in
Section 4 of the Loan Agreement, the Lender will make such Advance available to
the Borrower at the offices of the Lender in El Paso,
Texas. Each Advance will
be evidenced by a separate promissory note ("Uncommitted Line Note") issued
pursuant to the Loan Agreement. Interest on all Uncommitted Line Notes issued
pursuant to the Loan Agreement shall be at the rates set forth below (being the
same rate as in the Revolving Credit Note) and shall be due and payable
quarterly, and each Uncommitted Line Note shall mature not later than August 31,
2003:
CONSOLIDATED INDEBTEDNESS TO
CONSOLIDATED EBITDA RATIO LIBO RATE (AS DEFINED IN NOTE) PLUS
---------------------------- -----------------------------------
Under 1.00x 0.97%
1.00x to 1.25x 0.97%
1.26x to 1.50x 0.97%
1.51x to 1.75x 1.25%
1.76x to 2.00x 1.25%
2.01x to 2.25x 1.52%
2.26x to 2.50x 1.52%
2.51x to 2.75x 2.02%
Greater than 2.75x 2.02%
9. ADDITION OF CO-OBLIGOR. On and after the date of the Amendment,
Xxxxx of Xxxx Limited, a Barbados corporation, shall be a co-obligor on the
Revolving Credit Note and any Uncommitted Line Notes.
10. GUARANTIES. Each of the undersigned Guarantors has this date
executed a Continuing Guaranty Agreement, absolutely and unconditionally
guaranteeing payment of the Revolving Credit Note and any Advances under the
Uncommitted Line Notes.
11. NEGATIVE PLEDGE. Section 8.03 of the Loan Agreement is hereby
amended to add Xxxxx of Xxxx Limited (Barbados), and shall read in its entirety
as follows:
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8.03 Liens. Neither Borrower, Limited nor Xxxxx of Xxxx
Limited (Barbados) shall grant, create, incur, assume, permit or suffer
to exist any Lien upon its property, assets or revenues, whether now
owned or hereafter acquired, except:
(a) liens for taxes not yet due, or which are being
contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of such
party in accordance with generally accepted accounting principles;
(b) other Liens incidental to the conduct of its
business or the ownership of its assets which (i) are expressly
subordinated to all debt due Lender, and (ii) which do not in the
aggregate materially detract from such party's ability to perform
its obligations hereunder or in connection herewith;
(c) liens created by this Agreement, or hereafter
granted to Lender for the benefit of Lender;
(d) purchase money Liens granted in connection with
any purchase of equipment;
(e) liens, or any existing pledge of a deposit,
securing the payment of senior debt by an Affiliate or Subsidiary
to a foreign financial institution as disclosed in the financial
statements delivered pursuant to Section 5.07 of this Agreement or
which may be granted or amended and may be disclosed from time to
time by any such party.
12. 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.
13. 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.
14. 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.
15. CONDITIONS. This Amendment shall not be effective unless and until
the Lender 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, all duly executed.
16. 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.
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17. 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.
18. 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.
19. 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.
20. Binding Effect. This Amendment shall be binding upon and inure 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.
21. Other Terms. Except as expressly provided herein, all of the terms
and conditions of the Loan Agreement and the Guaranties (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.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
XXXXX OF XXXX L.P., a
Texas limited partnership
By: Xxxxx of Xxxx Nevada Corporation
General Partner
By: /s/ XXXXXXX X. XXXXXX
------------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President--Finance and Chief
Financial Officer
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XXXXX OF XXXX LIMITED, a Barbados corporation
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President--Finance,
Chief Financial Officer, and Treasurer
BORROWER
XXXXX OF XXXX LIMITED, a Bermuda corporation
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President--Finance and
Chief Financial Officer
HOT NEVADA, INC. a Nevada corporation
By: /s/ XXXX X. XXXXXXXXXX
----------------------------------
Xxxx X. Xxxxxxxxxx
President, Treasurer and Secretary
XXXXX OF XXXX NEVADA
CORPORATION, a Nevada corporation
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President--Finance and
Chief Financial Officer
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XXXXX OF XXXX TEXAS CORPORATION
a Texas corporation
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President--Finance,
Chief Financial Officer, and Treasurer
GUARANTORS
THE CHASE MANHATTAN BANK
By: /s/ XXXXX XXXXXXXXX
------------------------------
Xxxxx Xxxxxxxxx
Vice President
LENDER
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