Amendment No. 5 to Credit Agreement among Hallwood Entities and Bank Lenders, dated June 30, 2000

Summary

This amendment updates the terms of a credit agreement between Hallwood Energy Corporation, Hallwood Energy Partners, L.P., Hallwood Consolidated Resources Corporation, and several banks including First Union National Bank and Morgan Guaranty Trust Company of New York. The amendment resets the borrowing and debt limits to $70 million, outlines procedures for future adjustments, and adds new conditions for borrowing above $66 million. The agreement requires the borrowers to provide information for debt limit review and comply with new repayment terms, with non-compliance constituting a default. The amendment is governed by New York law.

EX-10.17 2 0002.txt AMENDMENT NO. 5 TO CREDIT AGREEMENT, DATED 6/30/00 EXECUTION COPY AMENDMENT NO. 5 TO CREDIT AGREEMENT AMENDMENT dated as of June 30, 2000 to the Amended and Restated Credit Agreement dated as of June 8, 1999 (the "Credit Agreement") among HALLWOOD ENERGY CORPORATION, HALLWOOD ENERGY PARTNERS, L.P. and HALLWOOD CONSOLIDATED RESOURCES CORPORATION (collectively, the "Borrowers"), the BANKS party thereto (the "Banks"), FIRST UNION NATIONAL BANK, as Collateral Agent and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H : WHEREAS, the parties hereto desire to amend the Credit Agreement as set forth herein; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Defined Terms; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. 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 Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby. SECTION 2. Resetting of the Availability Limit and the Debt Limit. (a) The definition of "Availability Limit" set forth in Section 1.01 of the Credit Agreement is amended by to read in its 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) $70,000,000; provided that on any date on which the Debt Limit is reset to a new amount in accordance with Section 4.17(c)(ii), Section 4.17(c)(iii) or Section 3 of Amendment No. 5 to this Agreement (and, in the case of any reset pursuant to Section 4.17(c)(iii) or Section 3 of such Amendment No. 5 that constitutes an increase in the Debt Limit, all the Banks have agreed to such new amount, in their sole discretion), the amount set forth in this clause (ii) shall be deemed to have been amended (effective on and as of the date such reset is effective) to be such (NY) 27008/757/AMEND/amend00.5.wpd new amount, without any further action on the part of any Borrower or any Bank. Except as set forth in the proviso to clause (ii) of the immediately preceding sentence, 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. (b) Effective on and as of the date hereof, the "Debt Limit", as determined in accordance with subsection (b) of Section 4.17 of the Credit Agreement, shall be $70,000,000. SECTION 3. Additional Review of the Debt Limit and Availability Limit. (a) (i) On or prior to August 1, 2000, the Borrowers shall provide to the Banks such information as the Required Banks may reasonably request in order to redetermine the Debt Limit. (ii) Reasonably promptly after receipt of the information delivered pursuant to clause (i), Banks having at least 70% of the aggregate amount of the Commitments shall have the option to redetermine the Debt Limit and the Agent shall notify the Borrowers of any such redetermination, upon which notice such new Debt Limit (the "New Debt Limit") shall become immediately effective and binding on all parties to the Credit Agreement and shall be the Debt Limit thereunder, until further determinations thereof in accordance with Section 4.17(c) of the Credit Agreement. The redetermination of the Debt Limit pursuant to this Section shall not affect the ability of the Borrowers to request an additional such redetermination pursuant to Section 4.17(c)(iv) of the Credit Agreement in accordance with, and subject to the terms of, such Section. (iii) If upon the effectiveness of the New Debt Limit, the aggregate unpaid principal amount of the Debt of the Borrowers exceeds the New Debt Limit, then the Borrowers shall take one of the actions contemplated by clauses (i), (ii) and (iii) of Section 2.10 of the Credit Agreement within three (3) Domestic Business Date from the date the Borrowers receive notice from the Agent of the New Debt Limit. (iv) Failure by the Borrowers to comply with the provisions of clause (iii) above shall constitute an "Event of Default" under the Credit Agreement and shall entitle the Agent, the Collateral Agent and the Banks to exercise all rights and remedies available under the Financing Documents upon the occurrence of an Event of Default. SECTION 4. Additional Condition to Borrowing. Section 6.03 of the Credit Agreement is amended by the addition of the following new subsection (f): (NY) 27008/757/AMEND/amend00.5.wpd (f) in the case of any Borrowing prior to the redetermination of the Debt Limit in accordance with Section 3 of Amendment No. 5 to the Agreement which results in the aggregate outstanding principal amount of the Loans exceeding $66,000,000, the fact that any Loan proceeds in excess of $66,000,000 shall be applied on the date of such Borrowing to the payment by the Borrower of the purchase price of additional Proved Reserves in the United States pursuant to a transaction which shall have been approved in writing by all Banks. SECTION 5. Representations of Borrowers. The Borrowers represent and warrant that (i) the representations and warranties of the Borrowers set forth in Article 3 of the Credit Agreement are true on and as of the date hereof and (ii) no Default has occurred and is continuing. SECTION 6. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 7. Counterparts. This Amendment 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 8. Effectiveness. This Amendment shall become effective as of the date hereof on the date on which the Agent shall have received from the Borrowers and the Required Banks a counterpart hereof signed by such party or facsimile or other written confirmation (in form satisfactory to the Agent) that such party has signed a counterpart hereof. (NY) 27008/757/AMEND/amend00.5.wpd IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. HALLWOOD ENERGY CORPORATION By: Name: Title: HALLWOOD CONSOLIDATED RESOURCES CORPORATION By: Name: Title: HALLWOOD ENERGY PARTNERS, L.P. By: HEC Acquisition Corp., its General Partner By___________________________ Name: Title: (NY) 27008/757/AMEND/amend00.5.wpd MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: Name: Title: FIRST UNION NATIONAL BANK By: Name: Title: WELLS FARGO BANK TEXAS, N.A. By: Name: Title: (NY) 27008/757/AMEND/amend00.5.wpd Acknowledged by: HALLWOOD LA PLATA, LLC LA PLATA ASSOCIATES, LLC By: HALLWOOD PETROLEUM, INC. By:______________________________________ Name: Title: The Manager of Hallwood La Plata LLC and La Plata Associates LLC CONCISE OIL AND GAS PARTNERSHIP EM NOMINEE PARTNERSHIP COMPANY MAY ENERGY PARTNERS OPERATING PARTNERSHIP LTD. By: HEC ACQUISITION CORP. By:______________________________________ Name: Title: The General Partner of Concise Oil and Gas Partnership, EM Nominee Partnership Company, May Energy Partners Operating Partnership LTD. HALLWOOD CONSOLIDATED PARTNERS, L.P. By: HALLWOOD CONSOLIDATED RESOURCES CORPORATION By:______________________________________ Name: Title: The General Partner of Hallwood Consolidated Partners, L.P. (NY) 27008/757/AMEND/amend00.5.wpd