EXHIBIT 10.1
SECOND AMENDMENT OF CREDIT AGREEMENT
THIS SECOND AMENDMENT OF CREDIT AGREEMENT (this "Amendment"), dated
as of March 31, 2002, 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 are parties to a Credit Agreement dated as of
March 10, 1999, as amended (as so amended, the "Credit Agreement"),
setting forth the terms upon which USB would make advances to Borrowers
and issue letters of credit at the request of Borrowers and by which
such advances and letters of credit would be governed and repaid.
Capitalized terms used herein but not defined herein shall have the
same meanings as set forth in the Credit Agreement.
B. Borrowers and USB desire that this Amendment be executed and
delivered in order to amend certain terms and provisions of 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 therefore:
"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 termination is made; provided that the Borrowing Base
(Oil and Gas) for the time period from April 1, 2002 through the
date that the October 31, 2002 redetermination of the Borrowing
Base (Oil and Gas) becomes effective shall be $2,200,000, 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 definition of "Borrowing Base Period" in Section 1.1
on page 2 of the Credit Agreement shall be deleted and the following
shall be substituted therefore:
"Borrowing Base Period" means each six-month time period
beginning May 1 or November 1 of each year until the Maturity
Date.
(c) The definition of "Commitment Amount (Oil and Gas)" in
the Section 1.1 on page 3 of the Credit Agreement shall be deleted and
the following shall be substituted therefore:
"Commitment Amount (Oil and Gas)" means, at any time,
the least of: (a) $2,200,000, (b) the Borrowing Base (Oil and Gas)
at the time, or (c) such lesser amount as may be elected by
Borrowers in accordance with the provisions of Section 2.10 below.
(d) The following new definition shall be inserted in
alphabetical order in Section 1.1 on page 5 of the Credit Agreement:
"LIBOR Spread" means, with respect to any LIBOR Tranche,
the following: (a) if the Loan Usage is less than 50 percent as of
the close of business of the first day of the LIBOR Interest Period
for such LIBOR Tranche, 1.75 percentage points per annum; (b) if
the Loan Usage is greater than or equal to 50 percent as of the
close of business on the first day of the LIBOR Interest Period for
such LIBOR Tranche, 2.25 percentage points per annum.
(e) The following new definition shall be interested in
alphabetical order in Section 1.1 on page 6 of the Credit Agreement:
"Loan Usage" means, as of the close of business on
any Business Day, the ratio of: (a) (1) the aggregate amount of all
Advances outstanding hereunder, including any Advances made on that
Business Day, plus (2) the face amounts if all Letters of Credit
outstanding hereunder, including any Letters of Credit issued on
that Business Day, (b) the Commitment Amount (Oil and Gas) in
effect at that time.
(f) The definition of "Maturity Date" in section 1.1 on page
6 of the Credit Agreement shall be deleted and the following shall be
substituted therefore:
"Maturity Date" means April 30, 2004; provided that, upon
the request of Borrowers, YSB may, in its sole discretion, extend
such time period at any time and from time to time to a date not
later than March 31, 2006 by giving written notice of such
extension to Borrowers, but nothing contained in this Agreement,
the Notes or any other Loan Document shall be deemed to commit or
require USB to grant any such extension.
(g) Section 2.4 (c) (1) on page 11 of the Credit Agreement
shall be deleted and the following shall be substituted therefore:
(C) (1) Except as otherwise provided in (3) below,
interest on each LIBOR Tranche shall accrue at a fixed annual rate
equal to LIBOR (Adjusted) with respect to such LIBOR Tranche plus
the LIBOR Spread with respect to such LIBOR Tranche.
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. Conditions Precedent. The obligations of the parties under the
Amendment are subject, at the option of USB, to the prior satisfaction
of the condition that Borrowers shall have delivered to USB the
following (all documents to be satisfactory in form and substance to USB and,
if appropriate, duly executed and/or acknowledged on behalf of the parties
other than USB):
(a) This Amendment.
(b) Any and all other loan documents required by USB,
including without limitation such amendments and supplements to
the Security Documents as may be required by USB and any and all
resolutions, certifications and other evidence of authority as
may be required by USB.
(c) An extension fee in the amount of $5,500.
4. Certification by Borrowers. Borrowers hereby certify to USB
that as of the date of this Amendment: (a) all of Borrowers'
representations and warranties contained in the Credit Agreement are
true, accurate and complete in all material respects, (b) Borrowers have
performed and complied with all agreements and conditions required to be
performed or complied with by Borrowers under the Credit Agreement
and/or any Loan Document on or prior to this date, and (c) no Default or
Event of Default has occurred under the Credit Agreement.
5. Condition 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 terms of this
Amendment and those of the Credit Agreement, the terms of this Amendment
shall control.
6. Expenses. Borrowers shall pay all reasonable expenses incurred
in connection with the transactions contemplated by this Amendment,
including without limitations all reasonable fees and expenses of USB's
attorney and all costs incurred in filing and recording any applicable
Security Documents.
7. 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 Petroleum 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
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