CONFORMED COPY
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 10 TO NOTE PURCHASE AGREEMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of May
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, as collateral agent (the "Collateral
Agent"), XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent") and
AMENDMENT dated as of May 31, 1997 between the Borrowers 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 party to a Second Amended and Restated Credit Agreement dated as
of March 31, 1995 (as amended prior to the Effective Date (as defined below),
the "Original Credit Agreement" and as amended and restated by this Amendment
and Restatement, the "Credit Agreement"); and
WHEREAS, pursuant to the Original Credit Agreement, the
Borrowers have issued to the order of each Bank promissory notes (the "Original
Notes") substantially in the form of Exhibit A to the Original Credit Agreement;
and
WHEREAS, the Borrowers, the Banks, the Collateral Agent and
the Agent desire to amend the Original Credit Agreement as set forth herein and
to restate the Original Credit Agreement in its entirety to read as set forth in
the Original Credit Agreement with the amendments specified below;
WHEREAS, the Borrowers and Prudential have entered into an
Amended and Restated Note Purchase Agreement dated as of May 7, 1990 (as amended
prior to the Effective Date, the "Original Note Purchase Agreement"); and
WHEREAS, the Borrowers have asked Prudential, and Prudential
has agreed, on the terms and conditions set forth below, to amend certain
provisions of the Original Note Purchase Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References; Amendment and Restatement
of the Original Credit Agreement and Amendment of Note Purchase Agreement.
Unless otherwise specifically defined herein, each term used herein which is
defined in the Original Credit Agreement or the Original Note Purchase
Agreement, as the case may be (including any Schedule thereto), shall have the
meaning assigned to such term therein. Each reference to "hereof", "hereunder",
"herein" and "hereby" and each other similar reference and each reference to
"this Agreement" and each other similar reference contained in the Original
Credit Agreement or the Original Note Purchase Agreement, as the case may be,
shall, from and after the Effective Date, refer to the Original Credit Agreement
as amended and restated hereby or the Original Note Purchase Agreement as
amended hereby. Effective on and as of the Effective Date, the Original Credit
Agreement shall be amended and restated in its entirety to read as set forth in
the Original Credit Agreement with the amendments specified below, and the
Original Note Purchase Agreement shall be amended by the amendments specified
below.
SECTION 2. Increase in Commitments. With effect from and
including the Effective Date, the Commitment of each Bank shall be the amount
set forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.09 of the Credit
Agreement.
SECTION 3. Amendments to the Definitions Contained in the
Original Credit Agreement. (a) The definitions of "Drawdown Termination Date"
and "Term Date" contained in Section 1.01 of the Original Credit Agreement are
amended to read in their entirety as follows:
"Drawdown Termination Date" means the earlier to occur of May
31, 1999 or the date on which the Borrowers elect to commence the Term
Period.
"Term Date" means the earlier to occur of May 31, 1999 or the
last day of May, August, November or February which first occurs after
the date on which the Borrowers elect to commence the Term Period.
(b) Definitions of "Availability Limit", "CD Margin",
"Commitment Fee Rate", "Euro-Dollar Margin", "Level I Status", "Level II Status"
and "Level III Status" are added in alphabetical order in Section 1.01 of the
Original Credit Agreement, 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) $51,000,000. 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.
"CD Margin" means, on any date, (i) 1.375%, if on such date
Level I Status exists, (ii) 1.625%, if on such date Level II Status
exists and (iii) 1.875%, if on such date Level III Status exists.
"Commitment Fee Rate" means, on any date, (i) .375%, if on
such date Level I Status or Level II Status exists and (ii) .50%, if on
such date Level III Status exists.
"Euro-Dollar Margin" means, on any date, (i) 1.25%, if on such
date Level I Status exists, (ii) 1.50%, if on such date Level II Status
exists and (iii) 1.75%, if on such date Level III Status exists.
"Level I Status" exists on any date if on such date the
aggregate outstanding principal amount of the Loans is less than 50% of
the Availability Limit.
"Level II Status" exists on any date if on such date (i) the
aggregate outstanding principal amount of the Loans is less than or
equal to 85% of the Availability Limit and (ii) Level I Status does not
exist on such date.
"Level III Status" exists on any date if on such date neither
Level I Status nor Level II Status exists.
SECTION 4. Change in the Interest Rate Applicable to the
Loans. (a) The first sentence of Section 2.04(a) of the Original Credit
Credit Agreement is amended to read in its entirety as follows:
Each Bank's CD Loans shall bear interest on the unpaid principal amount
thereof until payment in full thereof at a rate per annum equal to the
sum of (i) the Adjusted CD Rate for each Interest Period applicable
thereto plus (ii) the CD Margin, but in no event to exceed the Highest
Lawful Rate of such Bank; provided that if any CD Loan or any portion
thereof shall, as a result of clause (2) (b) (i) of the definition of
Interest Period, have an Interest Period of less than 30 days, such CD
Loan or portion thereof shall bear interest during such Interest Period
at the rate applicable to Base Rate Loans during such period.
(b) The first sentence of Section 2.04(b) of the Original
Credit Agreement is amended to read in its entirety as follows:
Each Bank's Euro-Dollar Loans shall bear interest on the unpaid
principal amount thereof until payment in full thereof at a rate per
annum equal to the sum of (i) the Adjusted Euro-Dollar Rate for each
Interest Period applicable thereto plus (ii) the Euro-Dollar Margin,
but in no event to exceed the Highest Lawful Rate of such Bank.
(c) Section 2.04(f) of the Original Credit Agreement is
deleted in its entirety.
(d) Section 2.04(g) of the Original Credit Agreement is
renumbered as Section 2.04(f).
SECTION 5. Change in Calculation of Commitment Fee.
Section 2.20 of the Original Credit Agreement is amended to read in its entirety
as follows:
SECTION 2.20. Commitment Fees. During the Revolving Credit
Period, the Borrowers shall pay to the Agent for the account of
each Bank (which payment shall be distributed to each Bank
ratably in accordance with each Bank's Commitment) a commitment
fee at the Commitment Fee Rate calculated for each day on the
daily average amount by which the Availability Limit exceeds the
aggregate outstanding principal amount of the Loans. Subject to
Section 2.09(b) hereof, such commitment fees shall accrue from
and including the Effective Date to but excluding the last day of
the Revolving Credit Period and shall be payable quarterly on
each March 31, June 30, September 30 and December 31 during the
Revolving Credit Period and on the last day of the Revolving
Credit Period.
SECTION 6. Additional Condition to Borrowing. Section 6.03 of
the Original Credit Agreement is amended by adding the following new subsection
(f) immediately after subsection (e) thereof, to read in its entirety as
follows:
(f) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the
Availability Limit.
SECTION 7. Change in Amendments Section. Section 8.05 of
the Original Credit Agreement is amended as follows:
(a) by deleting the "or" at the end of clause (iii) thereof
and replacing it with a comma;
(b) by deleting the period at the end of clause (iv) thereof and
replacing it with an "or"; and
(c) by adding a new clause (v) immediately after clause (iv) thereof,
to read it its entirety as follows:
(v) increase the amount set forth in the definition of Availability
Limit or change the provisions of Section 6.03(f).
SECTION 8. Amendment to Exhibit A. Exhibit A to the Original
Credit Agreement is amended to read in its entirety as set forth on Exhibit A
hereto.
SECTION 9. Amendments to Schedule B. Section 20 of Schedule B
to the Original Credit Agreement and the Original Note Purchase Agreement is
amended to read in its entirety as follows:
Section 20. Distributions, Etc. No Borrower will make, pay or
declare any dividend or distribution on any class of its stock or any
distribution of profits or purchase, redeem or otherwise acquire for
value any shares of any class of its stock or any of the partnership
interests in any Borrower now or hereafter outstanding, return any
capital to its Partners, or make any distribution of its assets to its
Partners as such ("Distributions") (a) if an Event of Default has
occurred and is continuing and the Majority Lenders have notified the
Borrowers in writing not to make such Distributions; (b) if the
aggregate Debt of the Borrowers exceeds, or would immediately after
such Distribution exceed, 100% of the Debt Limit; or (c) on any date (a
"Measuring Date") in any fiscal quarter of HEP if at such Measuring
Date, after giving effect to any such proposed Distribution to be made
on such Measuring Date, the aggregate amount of Distributions made in
the period of twelve consecutive calendar months ended on such
Measuring Date would exceed the Distribution Percentage of an amount
equal to (A) the sum of the amounts which are set forth opposite the
captions "Cash provided by operations before working capital changes"
and "Distributions received from affiliates" on consolidated statements
of cash flows of HEP for the period of four consecutive fiscal quarters
most recently ended on or prior to such Measuring Date and with respect
to which the Borrowers have delivered to the Lenders the financial
statements required to delivered by them pursuant to Section 1 (it
being understood that such financial statements are prepared in
accordance with generally accepted accounting principles consistent
with those utilized in preparing the consolidated statements of cash
flows of HEP as filed in HEP's annual report on Form 10-K for the
fiscal year ended December 31, 1994 with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934) minus (B)
the aggregate amount of payments made by HEP in such period to make
purchases permitted by Section 19(n); provided, however, that the
provisions of subparagraphs (b) and (c) of this Section 20 shall not
prevent the payment of any Distribution within 60 days of the
declaration thereof, if at said date of declaration such payment would
have complied with the provisions hereof; and provided, further, that
for purposes of this Section 20 no Distribution from any Borrower
directly or indirectly to another Borrower shall be deemed to be a
Distribution hereunder. In addition, for purposes of this Section 20:
"Distribution Percentage" means, at any date, (i) 65%, if on
such date Monthly Exposure is less than 50% of the Debt Limit on such
date and (ii) otherwise, 50%.
"Monthly Exposure" means, on any date, the daily average
outstanding principal amount of Debt of the Borrowers and their Subsidiaries
(including without limitation the loans under the Credit Agreement) during the
30-day period ending on the date immediately preceding such date.
SECTION 10. Amendments to Schedule D. Schedule D to the
Original Credit Agreement and the Original Note Purchase Agreement is amended to
read in its entirety as set forth on Schedule D hereto.
SECTION 11 . Transitional Provisions. On the Effective Date
but subject to the conditions set forth in Section 14 hereof, the Euro-Dollar
Loans and Domestic Loans outstanding to each Bank under the Original Credit
Agreement shall be deemed to be the initial Euro-Dollar Loans or Domestic Loans,
as the case may be, made by such Bank under the Credit Agreement, it being the
intention of the parties hereto that (i) all indebtedness evidenced by the
Original Notes shall, on and after the Effective Date, be solely evidenced by
the Notes (as defined in the Credit Agreement), (ii) the Loans outstanding under
the Original Agreement on the Effective Date shall continue to be outstanding on
such date as Domestic Loans or Euro-Dollar Loans, as appropriate, having
Interest Periods determined in accordance with the Original Credit Agreement and
bearing interest as provided with respect to Loans in Article II of the Credit
Agreement and (iii) the liens created by the Collateral Documents on the
properties and assets described therein shall be carried forward and continue in
full force and effect for the purpose of securing the Notes. Upon receipt of its
Note, each Bank will xxxx its Original Note AReplaced@ and send in due course to
HEP evidence that such Original Note has been so marked.
SECTION 12. Governing Law. This Amendment and Restatement
shall be governed by and construed in accordance with the laws of the State of
New York.
SECTION 13. Counterparts. This Amendment and Restatement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 14. Effectiveness. This Amendment and Restatement
shall become effective on the date (the "Effective Date") when each of the
following conditions shall have been satisfied:
(a) this Amendment and Restatement shall have been duly
executed and delivered by the Borrowers, the 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);
(b) the Agent shall have received for the account of each Bank
an executed Note substantially in the form of Exhibit A, duly and
validly issued and in the amount of such Bank's Commitment as set forth
on the signature pages hereof, dated on or prior to the Effective Date;
(c) the Agent shall have received a signed copy of a
certificate of the Secretary or an Assistant Secretary or other
appropriate officer of each of the Borrowers (or if such Borrower is a
partnership, a General Partner of such Borrower) certifying (i) the
names and true signatures of the Authorized Persons authorized to sign
the Notes, and the Collateral Documents to which the Borrowers or the
General Partners are or will be a party (including without limitation
any Collateral Documents Amendments referred to in subsection (f)) and
the other documents or certificates to be delivered pursuant thereto,
(ii) the resolutions of the Board of Directors (or equivalent body) of
the Borrowers and of each General Partner authorizing the transactions
contemplated hereby to which the Borrowers or such General Partner
are/is or will be a party, together with all documents evidencing other
necessary partnership or corporate action with respect to any thereof,
(iii) no amendments to the true copies of the Partnership Agreements
delivered to the Agent prior to the Effective Date, and (iv) no
amendments to the true copy of the Articles of Incorporation and
By-Laws of Hallwood G.P. delivered to the Agent prior to the Effective
Date;
(d) the Agent shall have received from King & Spalding,
counsel for the Borrowers, an opinion substantially to the effect of
Exhibit B hereto and covering such additional matters as the Majority
Lenders may reasonably request;
(e) the Agent shall have received from Xxxxx Xxxx & Xxxxxxxx,
special counsel for the Agent, an opinion in substantially the form of
Exhibit C hereto;
(f) the Collateral Agent shall have received duly executed
counterparts of the documents numbered (C)(1)(f), (C)(2)(e), C(3)(d),
(D)(4)(h), (D)(5)(d), (D)(5)(d), (D)(6)(d), (D)(7)(c), (E)(2)(e),
(E)(5)(e) listed on Schedule D hereto (the "Collateral Documents
Amendments"); and
(g) the Collateral Agent shall have received from counsel
satisfactory to it in each jurisdiction in which any Collateral
Documents Amendments are to be recorded or filed a favorable written
opinion as to the validity and binding effect of the Collateral
Documents and the perfection of the Liens created thereunder under the
law of such jurisdiction and as to such other matters incident to the
transactions herein contemplated as the Majority Lenders may reasonably
request.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment and Amendment and Restatement to be duly executed as of the date first
above written.
BORROWERS:
HALLWOOD ENERGY PARTNERS, L.P.
HEP OPERATING PARTNERS, L.P.
EDP OPERATING, LTD.
By: HEPGP LTD., its general partner
By: HALLWOOD G.P., INC.,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxx
Title: Vice President
MAY ENERGY PARTNERS OPERATING PARTNERSHIP LTD.
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.,
EM Nominee Partnership Company and
Concise Oil and Gas Partnership
BANKS:
Commitment
$25,000,000 XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Xxxx Xxxxxxxxx
Title: Vice President
$25,000,000 FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
$25,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
Title: Vice President
================
Total Commitment:
$75,000,000
================
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ Xxxx Xxxxxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK,
as Collateral Agent
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
PRUDENTIAL:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Xxxxxxx X. Xxx
Title: Vice President
