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EXHIBIT 10.17
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this "First Amendment") is
executed as of the 11th day of September, 2000, by and among HWG LLC, a Delaware
limited liability company ("Borrower"), The Hallwood Group Incorporated, a
Delaware corporation ("Parent"), First Bank Texas, N.A., as Administrative Agent
("Administrative Agent") and the financial institutions parties hereto as
Lenders (individually a "Lender" and collectively "Lenders").
WITNESSETH:
WHEREAS, Borrower, Parent, Administrative Agent and Lenders are parties
to that certain Credit Agreement dated as of December 21, 1999 (as amended, the
"Credit Agreement") (unless otherwise defined herein, all terms used herein with
their initial letter capitalized shall have the meaning given such terms in the
Credit Agreement); and
WHEREAS, pursuant to the Credit Agreement, Lenders have made the Term
Loan to Borrower;
WHEREAS, Borrower and Parent have requested that Lenders (a)
amend certain terms of the Credit Agreement in certain respects, and (b) waive
certain defaults of Borrower thereunder; and
WHEREAS, subject to the terms and conditions herein contained, Lenders
have agreed to Borrower's and Parent's request.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed,
Borrower, Parent, Administrative Agent and each Lender hereby agree as follows:
Section 1. Amendments. In reliance on the representations, warranties,
covenants and agreements contained in this First Amendment, and subject to the
terms and conditions contained herein, the Credit Agreement is hereby amended,
effective as of September 11, 2000, in the manner provided in this Section 1.
1.1. Amendment to Definitions. The definitions of "EBITDA" and "Net
Cash Flow" contained in Section 1.1 of the Credit Agreement shall be amended to
read in full as follows:
"EBITDA" shall mean, as to any Person, for any period, without
duplication, an amount equal to net income determined in accordance
with GAAP (provided, that, for purposes of determining net income to
derive Net Cash Flow for any period, leasing commissions shall be
included in such determination when such commissions are actually
received by such Person), plus, to the extent deducted from net income,
Interest Expense, depreciation, other non-cash
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expenses, and income tax expenses; provided, that, extraordinary gains
or losses for any such period, including, but not limited to, gains or
losses on the disposition of assets shall not be included in EBITDA.
"Net Cash Flow" shall mean, as to any Person for any period,
without duplication, an amount equal to (a) EBITDA for such period,
minus (b) for each such period, the sum of (1) scheduled principal and
interest payments with respect to all Hotel Mortgage Indebtedness, (2)
dividends actually made by Parent during such period with respect to
its Series B Preferred Stock, (3) required or scheduled deferred
purchase payments actually made by Parent during such period pursuant
to the terms of the Shareholder Agreement, and (4) actual Capital
Expenditures for such period for the maintenance of any fixed or
capital asset, plus (c) dividends actually received by Parent and/or
HEPGP from HECO during such period with respect to HECO's preferred and
common stock, plus (d) distributions actually received by the Borrower
from HRY during such period with respect to HRY's limited partnership
units and general partnership interests, plus (e) all cash proceeds of
loans made to such Person by a shareholder of Parent (or an Affiliate
of such shareholder) if all repayments of principal and interest with
respect to such loans are subordinated to the prior payment in full of
all Lender Indebtedness on terms acceptable to the Administrative Agent
and Lenders in their sole discretion.
Section 2. Waiver of Default. Each Lender hereby waives compliance by
Borrower with Section 7.1(b) of the Credit Agreement with respect to, but only
with respect to, the Fiscal Quarter ending on June 30, 2000. The waiver
contained herein is limited solely to Section 7.1(b) of the Credit Agreement and
solely with respect to the Fiscal Quarter ending June 30, 2000. Nothing
contained herein shall be construed as a waiver of any other provision of the
Credit Agreement or any other Financing Document, and nothing contained herein
shall obligate any Lender to grant any subsequent waiver under any other
provision of the Credit Agreement or any other Financing Document.
Section 3. Effectiveness of Amendment. This First Amendment shall be
effective automatically and without necessity of any further action by
Administrative Agent, Borrower, Parent or any Lender when counterparts hereof
have been executed by Administrative Agent, Borrower, Parent and Required
Lenders, and all conditions to the effectiveness hereof set forth herein have
been satisfied.
Section 4. Representations and Warranties. In order to induce
Administrative Agent and Lenders to enter into this First Amendment, Borrower
and Parent hereby represent and warrant to Administrative Agent and each Lender
that:
4.1. Accuracy of Representations and Warranties. Each representation
and warranty of each Credit Party contained in the Financing Documents are true
and correct in all material respects as of the date hereof (except to the extent
that such representations and warranties are expressly made as of a particular
date, in which event such representations and warranties were true and correct
as of such date).
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4.2. Absence of Defaults. Neither a Default nor an Event of Default has
occurred which is continuing or which has not otherwise been waived by Lenders.
4.3. No Defenses. No Credit Party has any defenses to payment,
counterclaims or rights of set-off with respect to the Lender Indebtedness on
the date hereof.
Section 5. Miscellaneous.
5.1. Reaffirmation of Financing Documents; Extension of Liens. Any and
all of the terms and provisions of the Credit Agreement and the Financing
Documents shall, except as amended and modified hereby, remain in full force and
effect. Borrower hereby extends the Liens securing the Lender Indebtedness until
the Lender Indebtedness has been paid in full, and Borrower and Parent hereby
agree that the amendments and modifications herein contained shall in no manner
affect or impair the Lender Indebtedness, the Liens securing payment and
performance thereof and/or the Facility Guaranty executed and delivered by
Parent in connection with the Credit Agreement.
5.2. Parties in Interest. All of the terms and provisions of this First
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.
5.3. Counterparts. This First Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however, no
party shall be bound by this First Amendment until this First Amendment has been
executed by Borrower, Parent, Administrative Agent and Required Lenders at which
time this First Amendment shall be binding on, enforceable against, and inure to
the benefit of, Borrower, Parent, Administrative Agent and all Lenders.
Facsimiles shall be effective as originals.
5.4. COMPLETE AGREEMENT. THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND
THE OTHER FINANCING DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
5.5. Headings. The headings, captions and arrangements used in this
First Amendment are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this First Amendment, nor
affect the meaning thereof.
5.6. Expenses. Borrower and Parent jointly and severally agree to
promptly pay all reasonable fees and expenses of counsel to Administrative Agent
incurred by Administrative Agent in connection with the preparation, negotiation
and execution of this First Amendment and all related documents.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly executed by their respective authorized officers on the date and year first
above written.
BORROWER:
HWG LLC
By:
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Name:
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Title:
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PARENT:
THE HALLWOOD GROUP INCORPORATED
By:
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Name:
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Title:
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ADMINISTRATIVE AGENT AND LENDERS:
FIRST BANK TEXAS, N.A.,
individually and as Administrative Agent
By:
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Xxxx Cott,
Senior Vice President
WALHALLA STATE BANK
By:
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Name:
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Title:
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[Signature Page]
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FIRST INTERNATIONAL BANK & TRUST
By:
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Name:
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Title:
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BREMER BUSINESS FINANCE CORPORATION
By:
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Name:
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Title:
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MIDSTATES BANK, N.A.
By:
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Name:
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Title:
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HERITAGE NATIONAL BANK
By:
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Name:
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Title:
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FIRST NATIONAL BANK OF DEERWOOD
By:
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Name:
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Title:
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ROSEMOUNT NATIONAL BANK
By:
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Name:
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Title:
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SAND RIDGE BANK
By:
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Name:
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Title:
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FIRST NATIONAL BANK & TRUST CO. OF
WILLISTON
By:
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Name:
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Title:
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XXXXXX BANK, NATIONAL ASSOCIATION
(Grand Forks, N.D. Branch)
By:
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Name:
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Title:
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SECURITY STATE BANK
By:
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Name:
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Title:
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XXXXXX BANK, NATIONAL ASSOCIATION
(Marshall, Minnesota Branch)
By:
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Name:
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Title:
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