SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 31, 1997 among
HALLWOOD CONSOLIDATED RESOURCES CORPORATION, a Delaware corporation ("HCRC") and
HALLWOOD CONSOLIDATED PARTNERS, L.P., a Colorado limited partnership
(individually a "Borrower" and collectively the "Borrowers"), the BANKS listed
on the signature pages hereof (the "Banks"), First Union National Bank, as
collateral agent (the "Collateral Agent"), ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW
YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrowers, the Banks, the Collateral Agent and the Agent are
party to an 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;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References; Amendment and Restatement of the
Original Credit Agreement. Unless otherwise specifically defined herein, each
term used herein which is defined in the Original Credit Agreement 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 shall, from and after the Effective Date, refer to the
Original Credit Agreement as amended and restated 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.
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) $25,000,000. 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 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. Amendments to Distribution Covenant. Section 4.21 of the
Original Credit Agreement is amended to read in its entirety as follows:
Section 4.21. Distributions, Etc. HCRC will not 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 now or
hereafter outstanding ("Distributions") (a) if an Event of
Default has occurred and is continuing and the Required Banks
have notified HCRC in writing not to make such Distributions;
provided that no such notice shall be required for an Event of
Default pursuant to subsections (a) (g), (h) or (l) of Section
5.01; (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 HCRC 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 HCRC 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 HCRC as filed in HCRC'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 HCRC in
such period to make purchases permitted by Sections 4.19(m) or
(n); provided, however, that the provisions of subparagraphs (b)
and (c) of this Section 4.21 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. 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) during the
30-day period ending on the date immediately preceding such date.
SECTION 7. 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 8. 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 9. 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 10. Amendments to Schedule D. Schedule D to the Original Credit
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 ▇▇▇▇ its Original Note "Replaced" and in due course return
its Original Note to HEP.
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 and the Agent
(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 HCRC certifying (i) the names and true signatures of the Authorized
Persons authorized to sign the Notes, and the Collateral Documents to which
HCRC is or will be a party, on behalf of itself or as general partner of
HCP (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 HCRC authorizing the transactions
contemplated hereby to which is or will be a party (on behalf of itself or
as general partner of HCP), 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 Agreement of HCP
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 HCRC
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 Required Banks may reasonably
request;
(e) the Agent shall have received from ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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 Required
Banks may reasonably request.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Restatement to be duly executed as of the date first above written.
BORROWERS:
HALLWOOD CONSOLIDATED
RESOURCES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
HALLWOOD CONSOLIDATED PARTNERS, L.P.
By: HALLWOOD CONSOLIDATED
RESOURCES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
The General Partner of Hallwood
Consolidated Partners, ▇.▇.
▇▇▇▇▇:
Commitment
$11,666,667 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
$11,666,667 FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
$11,666,666 NATIONSBANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
================
Total Commitment:
$35,000,000
================
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President