[CONFORMED COPY]
AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
WAIVER UNDER THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
WAIVER UNDER NOTE PURCHASE AGREEMENT
AMENDMENT and WAIVER dated as of October 31, 1997 among HALLWOOD ENERGY
PARTNERS, L.P. ("HEP"), HEP OPERATING PARTNERS, L.P., EDP OPERATING, LTD., EM
NOMINEE PARTNERSHIP COMPANY, CONCISE OIL AND GAS PARTNERSHIP, MAY ENERGY
PARTNERS OPERATING PARTNERSHIP LTD. (collectively, with HEP, the "Borrowers"),
the BANKS listed on the signature pages hereof (the "Banks"), First Union
National Bank of North Carolina as collateral agent (the "Collateral Agent"),
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent") and THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Prudential").
W I T N E S S E T H :
WHEREAS, the Borrowers, the Banks, the Collateral Agent and the Agent are
parties to a Third Amended and Restated Credit Agreement (as amended, the
"Credit Agreement"); and
WHEREAS, the Borrowers and Prudential have entered into an Amended and
Restated Note Purchase Agreement dated as of May 7, 1990 (as amended by
Amendment Nos. 1 through 10 thereto, the "Note Purchase Agreement");
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Credit Agreement or the
Note Purchase Agreement, as the case may be (including any Schedule thereto),
shall have the meaning assigned to such term in such agreement. Each reference
to "hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Credit Agreement" or "this Note Purchase Agreement"
and each other similar reference contained in the Credit Agreement or the Note
Purchase Agreement, as the case may be, shall from and after the date hereof
refer to the Credit Agreement or the Note Purchase Agreement, as the case may
be, as amended hereby.
1
SECTION 2. Resetting of the Availability Limit. (a) The definitions of
"Availability Limit" and "HGI" set forth in Section 1.01 of the Credit Agreement
are hereby amended to read in their entirety as follows:
"Availability Limit" means, on any date, an amount equal to the lesser
of (i) the aggregate amount of the Commitments at such date and (ii)(x) at
any date prior to the Arcadia Date, $46,000,000 and (y) at any date on or
after the Arcadia Date, $52,000,000. The Availability Limit may be
increased only by an amendment in accordance with Section 8.05, which the
Banks may agree to or not agree to in their sole discretion.
"HGI" means HEPGP Ltd., a Colorado limited partnership, and its
successors.
(b) A new definitions of "Arcadia Date" is added in Section 1.01 of the
Credit Agreement, to read in its entirety as follows:
"Arcadia Date" means the date on which the Borrowers consummate the
acquisition of the properties described in the "Arcadia Acquisition Bank
Case Pricing" engineering report dated July 1, 1997 substantially on the
terms described by the Borrowers to the Banks prior to the date of
effectiveness of Amendment No.1 to this Agreement dated as of October 31,
1997 among the Borrowers, the Banks, the Collateral Agent, the Agent and
Prudential.
SECTION 3. Amendment to Representation Regarding General Partners. The fist
two sentences of Section 3.22 of the Credit Agreement are amended to read in
their entirety as follows: "HGI is the sole general partner of HEP, Operating
and HEP Operating. Hallwood G.P. is the sole general partner of MEPO."
SECTION 4. Temporary Waiver of the Collateral Coverage Requirement. The
Lenders hereby waive compliance by the Borrowers with clause (i) of Section 13
of Schedule B of the Credit Agreement and the Note Purchase Agreement and any
Event of Default arising under the Credit Agreement and the Note Purchase
Agreement solely as a result of noncompliance by the Borrowers with such clause
(i) as a result of the consummation by the Borrowers of the acquisition of the
properties described in the "Arcadia Acquisition Bank Case Pricing" engineering
report dated July 1, 1997 substantially on the terms described by the Borrowers
to the Banks prior to the date hereof; provided that (x) the waiver granted
pursuant to this Section shall expire the date which falls 30 days after the
date of consummation of such acquisition and (y) prior to the expiration of such
waiver, such waiver shall be effective only so long as Petroleum Properties
representing not less than 75% of the value of Petroleum Properties shall be
2
subject to valid first-priority Liens in favor of the Lenders pursuant to the
Collateral Documents.
SECTION 5. No Other Waivers. Other than as specifically provided herein,
this Amendment and Waiver shall not operate as a waiver of any right, remedy,
power or privilege of the Agent, the Collateral Agent, the Banks or Prudential
under the Credit Agreement, the Note Purchase Agreement or any other Financing
Document or of any other term or condition thereof.
SECTION 6. Effectiveness. This Amendment and Waiver shall become effective
on the date on which the Agent shall have received counterparts of this
Amendment and Waiver duly executed by the Borrowers, the Required Banks, the
Collateral Agent, the Agent and Prudential (or, in the case of any party as to
which an executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party).
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver to be duly executed as of the date first above written.
BORROWERS:
HALLWOOD ENERGY PARTNERS, L.P.
HEP OPERATING PARTNERS, L.P.
By: HEPGP Ltd.
By: Hallwood G.P., Inc.
By: /s/ Xxxxxx X. Xxxxxxxx
Title: Vice President
The General Partner of Hallwood
Energy Partners, L.P. and HEP
Operating Partners, L.P.
4
MAY ENERGY PARTNERS OPERATING
PARTNERSHIP LTD.,
EDP OPERATING, LTD.
individually and as a
general partner of
EM NOMINEE PARTNERSHIP COMPANY
and
CONCISE OIL AND GAS PARTNERSHIP
EM NOMINEE PARTNERSHIP COMPANY
CONCISE OIL AND GAS PARTNERSHIP
By: HALLWOOD G.P., INC.,
formerly known as
QUINOCO ENERGY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Title: Vice President
The General Partner of May Energy
Partners Operating Partnership Ltd.
and EDP Operating, Ltd. and EM Nominee
Partnership Company and Concise Oil
and Gas Partnership
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Xxxx Xxxxxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By: /s/ Xxxxxx Xxxxxx
Title: Senior Vice President
5
NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
Title: Vice President
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ Xxxx Xxxxxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Collateral Agent
By: /s/ Xxxxxx Xxxxxx
Title: Senior Vice President
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxxxxx X. Xxx
Title: Vice President
6
