Exhibit 10.2
FIRST AMENDMENT OF CREDIT AGREEMENT
THIS FIRST AMENDMENT OF CREDIT AGREEMENT (this "Amendment"), dated as of
April 25, 2000, is by and among SANTA BARBARA PARTNERS, an Oklahoma general
partnership ("SBP"), and HALLADOR PETROLEUM, LLP, a Colorado limited
partnership ("Hallador"), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association (herein called "USB"). SBP and Hallador are herein collectively
called "Borrowers."
RECITALS
A. Borrowers and USB entered into a Credit Agreement dated as of
March 10, 1999 (the "Credit Agreement"), in order to set forth the terms upon
which USB would make available to Borrowers an oil-and-gas-based credit
facility for making advances and issuing letters of credit upon the request of
Borrowers and a securities-based credit facility for making advances upon the
request of Borrowers. The Credit Agreement provides for the terms by which
such credit facilities are to be governed and repaid. Capitalized terms used
herein but not refined herein shall have the same meanings as set forth in the
Credit Agreement.
B. Borrowers and USB have agreed that the maximum principal amount
of the "Oil and Gas Facility" (as defined in the Credit Agreement) should be
increased, that the "Securities Facility" (as defined in the Credit Agreement)
should be cancelled and that a minimum liquidity covenant should be added to
the Credit Agreement.
AMENDMENT
NOW, THEREFORE, in consideration of $10.00 and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Credit Agreement. The Credit Agreement shall be, and hereby
is, amended as follows, effective as of the date hereof:
(a) The definition of "Borrowing Base (Oil and Gas)" in
Section 1.1 on page 2 of the Credit Agreement shall be deleted and the
following shall be substituted therefor:
"Borrowing Base (Oil and Gas)" means, at any time prior to the
Maturity Date, the aggregate loan value of all Borrowing Base Properties, as
determined by USB in its sole and absolute discretion, using such assumptions
as to pricing, discount factors, discount rates, expenses and other factors as
USB customarily uses as to borrowing-base oil and gas loans at the time such
determination is made; provided that the Borrowing Base (Oil and Gas) for the
time period from April 25, 2000 through the date that the October 31, 2000
redetermination of the Borrowing Base (Oil and Gas) becomes effective shall be
$3,900,000, unless Borrowers and USB hereafter mutually agree upon a different
amount or unless the Borrowing Base (Oil and Gas) is redetermined pursuant to
Section 2.10 below prior to such date.
(b) The "Borrowing Base (Securities)" shall be set at zero
for all times on or after April 25, 2000.
(c) The definition of "Commitment Amount (Oil and Gas)" in
Section 1.1 on page 3 of the Credit Agreement shall be deleted and the
following shall be substituted therefor:
"Commitment Amount (Oil and Gas)" means, at any time,
the least of: (a) $3,900,000, (b) the Borrowing Base (Oil and Gas) at that
time, or (c) such lesser amount as may be elected by Borrowers in accordance
with the provisions of Section 2.10 below.
(d) The definition of "Commitment Amount (Securities)" in
Section 1.1 on page 3 of the Credit Agreement shall be deleted and the
following shall be substituted therefor:
"Commitment Amount (Securities)" means, at any time, $0.
(e) Section 2.10(b) on page 14 of the Credit Agreement shall be
deleted and the following shall be substituted therefor:
(b) No calculations of the Borrowing Base (Securities)
shall be required after April 25, 2000.
(f) Section 6.2(a) on page 32 of the Credit Agreement shall be
deleted and the following shall be substituted therefor:
(a) Financial Covenants. (1) Borrowers will not permit
the Funded Debt Ratio to be greater than 50 percent as of the end of any Fiscal
Quarter.
(2) Borrowers will at all times maintain unencumbered
cash and unencumbered marketable securities having an aggregate fair value of
not less $1,000,000.
2. Loan Documents. All references in any document to the Credit
Agreement shall be deemed to refer to the Credit Agreement, as amended pursuant
to this Amendment.
3. Representations and Warranties. Borrowers hereby certify to USB
that, as of the date of this Amendment, all of Borrowers' representations and
warranties contained in the Credit Agreement are true, accurate and complete in
all material respects, no Default has occurred and no event has occurred which,
with the giving of notice, the lapse of time, or both, would constitute a
Default.
4. Continuation of the Credit Agreement. Except as specified in
this Amendment, the provisions of the Credit Agreement shall remain in full
force and effect, and if there is a conflict between the terms of this
Amendment and those of the Credit Agreement or any other document executed
and delivered in connection therewith, the terms of this Amendment shall
control.
5. Expenses. Borrowers shall pay all reasonable expenses incurred
in connection with the transactions contemplated by this Amendment, including
without limitation all reasonable fees and expenses of USB's attorney and all
costs incurred in filing and recording any applicable Security Documents.
6. Miscellaneous. This Amendment shall be governed by and
construed under the laws of the State of Colorado and shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
This Amendment may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
EXECUTED as of the date first above written.
SANTA BARBARA PARTNERS
By: Hallador Production Company,
General Partner
By: /S/Victor P. Stabio
Victor P. Stabio,
President
HALLADOR PETROLEUM, LLP
By: Hallador Petroleum Company,
General Partner
By: /S/Victor P. Stabio
Victor P. Stabio,
President
U.S. BANK NATIONAL ASSOCIATION
By: /s/Monte E. Deckerd
Monte E. Deckerd,
Vice President