FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT ("First
Amendment") is made and entered into as of the 28th day of March, 1997, by and
between Equus II Incorporated, a Delaware corporation, with offices and place of
business at 2929 Allen Parkway, Houston, Texas 77019 (hereinafter called
"Borrower") and NationsBank of Texas, N.A. a national banking association, with
offices at 700 Louisiana, Houston, Texas 77002 (hereinafter called "Lender").
For and in consideration of the mutual covenants and agreements herein
contained, Borrower and Lender hereby amend as of the date of this Agreement
that certain Amended and Restated Loan Agreement ("Loan Agreement") between
Borrower and Lender dated as of the 29th day of March 1996, in the following
respects:
Section 1. AMENDMENTS TO LOAN AGREEMENT.
(a) Section 1.1 of the Loan Agreement is hereby amended to read as
follows:
"1.1 INDEBTEDNESS. Upon the terms and conditions hereinafter set
forth, the Lender agrees to lend to and/or issue letters of credit for the
account of Borrower in an aggregate of up to $30,000,000.00 outstanding at
any time as evidenced by the Credit Facility to be extended to the
Borrower by the Lender as more specifically described in Section 1.3 and
Section 1.4 hereof."
(b) The definition of "Commitment Fee - Facility C" is hereby amended to
read as follows:
"(12) "Commitment Fee-Facility C" shall mean a fee in the amount of
$50,000, payable upon execution of this Agreement and a fee in the amount
of $75,000 payable on March 28, 1997."
(c) The definition of "Maturity Date" is hereby amended to read as
follows:
"(36) "Maturity Date" means April 1, 1998."
(d) The first sentence of Section 1.3(a) of the Loan Agreement is hereby
amended to read as follows:
"(a) agrees to make Loans to Borrower pursuant to a revolving line
of credit up to but not in excess of an aggregate principal amount
outstanding at any time of $22,500,000.00, provided the aggregate amount
of Loans outstanding pursuant to this Section 1.3, when combined with the
amount of outstanding Credits, shall not exceed Borrowing Base A."
(e) Section 1.4(c) of the Loan Agreement is hereby amended to read as
follows:
"(c) In the event the Borrower completes an equity offering,
Borrower shall either (i) repay the outstanding principal balance of
Revolving Facility B in full or (ii) if the net proceeds are less than the
outstanding principal balance of Revolving Facility B, apply 100% of the
net proceeds of such offering to Revolving Facility B within ten (10) days
following completion of such offering and no advances shall be permitted
pursuant to Revolving Facility B for a period of one (1) Business Day
following such repayment."
(f) Section 1.7(a) and 1.7(b) of the Loan Agreement are hereby amended to
read as follows:
"1.7 FACILITY C. (a) The Lender, during the period from the date of
this Agreement until April 1, 1998, subject to the terms and conditions of
this Agreement, and subject to the condition that at the time of each
borrowing issuance hereunder no Default or Event of Default has occurred
and is then continuing to occur and that the representations and
warranties given by the Borrower in Section 2 as of the date of this
Agreement shall remain true and correct in all material respects (except
for representations and warranties (i) which are made as of a particular
date or (ii) as to which the facts which gave rise to the representation
or warranty have changed as a result of circumstances or transactions
which are contemplated or permitted pursuant to this Agreement), agrees to
make a loan to Borrower up to but not in excess of an aggregate principal
amount outstanding at any time of $65,000,000, on the same Business Day
upon receipt
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from Borrower on or before 1:00 p.m. Houston time of written applications
for the loan hereunder in the form attached as Exhibit "1.3.1".
(b) The Borrower's obligation to repay Facility C shall be evidenced
by a promissory note of the Borrower in substantially the form attached as
Exhibit "1.7" hereto, payable to the order of Lender. The Facility C Note
shall bear interest at a variable interest rate of one percent (1%) over
the Cash Collateral Account Rate per annum not to exceed the maximum
non-usurious interest rate permitted by applicable law with principal
amounts due on or before the fifth (5th) Business Day after each principal
advance, interest due monthly on the 15th of each month and concurrently
with principal payments, and the balance of principal plus accrued and
unpaid interest due and payable on or before April 1, 1998."
(g) Section 3.1(g) of the Loan Agreement is hereby amended to read as
follows:
"(g) on or before March 28, 1997, Borrower will provide Lender
updated summary information regarding the Portfolio Investments in form
and substance satisfactory to Lender, indicating information as of such
date relating to buy-sell rights and obligations, funding obligations,
restrictions on transfer, voting agreements, registration rights and such
similar information as Lender may reasonably request."
(h) Section 3.10(a) of the Loan Agreement is hereby amended to read as
follows:
"(a) The aggregate indebtedness pursuant to Revolving Facility A and
the amount of outstanding Credits shall never exceed Borrowing Base A. The
Borrowing Base A is the lesser of (i) $22,500,000 and (ii) fifty percent
(50%) of the Current Fair Market Value of Borrower's Eligible Public
Securities provided that the sum of (x) indebtedness pursuant to Revolving
Facility A plus (y) outstanding Credits plus (z) indebtedness pursuant to
Revolving Facility B shall not exceed thirty-three percent (33%) of
Borrower's Net Asset Value."
(i) Section 3.10(b) of the Loan Agreement is hereby amended to read as
follows:
"(b) The aggregate indebtedness pursuant to Revolving Facility B
shall never exceed Borrowing Base B. The Borrowing Base B is the least of
(i) $7,500,000, (ii) twenty-five percent (25%) of the Current Fair Market
Value of the Eligible Other Securities and (iii) Borrowing Base A,
provided that the
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sum of (x) indebtedness pursuant to Revolving Facility A plus (y)
outstanding Credits plus (z) indebtedness pursuant to Revolving Facility B
shall not exceed thirty-three percent (33%) of Borrower's Net Asset
Value."
(j) Section 4.1(b) of the Loan Agreement is hereby amended to read as
follows:
"(b) indebtedness for borrowed money and capitalized lease
obligations not to exceed, in the aggregate, $500,000 outstanding at any
time; and".
(k) Exhibit 2.4 to the Loan Agreement is hereby replaced with Exhibit 2.4
attached hereto, and all references in the Loan Agreement as amended by this
First Amendment to "Exhibit 2.4" shall refer to Exhibit 2.4 attached hereto.
(l) The reference in the Borrowing Base Certificate, attached as Exhibit
"3.10" to the Loan Agreement, to "$20,000,000" is hereby amended to read
"$30,000,000".
Section 2. CLOSING.
The closing of the transactions contemplated by this First Amendment is
subject to the satisfaction of the following conditions.
2.1 COUNSEL TO LENDER. All legal matters incident to the transactions
herein contemplated shall be satisfactory to Gardere Wynne Sewell & Riggs,
L.L.P., counsel to the Lender.
2.2 REQUIRED DOCUMENTS.
(a) The Lender shall have received certified copies of resolutions of the
Board of Directors of the Borrower in form and substance satisfactory to Lender
with respect to authorization of this First Amendment, the Facility A Promissory
Note of the Borrower dated the date hereof in favor of the Lender in the
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original principal amount of $22,500,000, the Facility B Promissory Note of the
Borrower dated the date hereof in favor of the Lender in the original principal
amount of $7,500,000, the Facility C Promissory Note of the Borrower dated the
date hereof in favor of the Lender in the original principal amount of
$65,000,000 (collectively, the "Notes"), the Ratification of Security Agreement
- - Pledge dated as of the date hereof (the "Ratification of Security Agreement"),
and the other corporate instruments provided for herein.
(b) The Lender shall have received a certificate of the Secretary of the
Borrower of the names of officers of the Borrower to sign this First Amendment,
the Notes, the Ratification of Security Agreement and the other instruments or
certificates related hereto together with the true signatures of such officers.
(c) The Lender shall have received fully executed copies of the First
Amendment, the Notes, and the Ratification of Security Agreement.
(d) The Lender shall have received originals of all certificates, notes or
other instruments subject to the Security Agreement - Pledge dated as of March
18, 1996 between Borrower and Lender, as ratified by the Ratification of
Security Agreement.
2.3 OPINION OF COUNSEL. The Lender shall have received from Porter &
Hedges, L.L.P., counsel to the Borrower, a written opinion, satisfactory to the
Lender and its counsel.
2.4 COMMITMENT FEE. The Lender shall have received a commitment fee from
the Borrower in the amount of $10,000.
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Section 3. RATIFICATION.
Except as amended hereby, the Loan Agreement shall remain unchanged and
the terms, conditions, representations, warranties, and covenants of said Loan
Agreement and the Security Instruments, including but not limited to the
Security Agreement, are true as of the date hereof, are ratified and confirmed
in all respects and shall be continuing and binding upon the parties.
Section 4. DEFINED TERMS.
All terms used in this First Amendment which are defined in the Loan
Agreement shall have the same meaning as in the Loan Agreement, except as
otherwise indicated in this First Amendment.
Section 5. MULTIPLE COUNTERPARTS.
This First Amendment may be executed by the parties hereto in several
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
Section 6. APPLICABLE LAW.
This First Amendment shall be deemed to be a contract under and subject
to, and shall be construed for all purposes in accordance with the laws of the
State of Texas.
Section 7. FINAL AGREEMENT.
THE WRITTEN LOAN AGREEMENTS IN CONNECTION WITH THIS FIRST AMENDMENT
REPRESENT THE FINAL AGREEMENT BETWEEN THE BORROWER AND THE LENDER AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE BORROWER AND THE LENDER. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE
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LENDER AND THE BORROWER.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed by their duly authorized officers as of the 28th day of March, 1997.
EQUUS II INCORPORATED
By: /s/ PATRICK M. CAHILL
Name: Patrick M. Cahill
Title: Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ LARRY B. BELL
Name: Larry B. Bell
Title: Senior Vice President
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