AMENDED AND RESTATED CONTINUING GUARANTY
exhibit
10.1
AMENDED
AND RESTATED CONTINUING GUARANTY
FOR
VALUE
RECEIVED and in consideration of credit given or to be given, and of other
financial accommodations afforded or to be afforded to SUNRISE
COAL, LLC,
an
Indiana limited liability company (hereinafter
referred to as “Borrower”), pursuant to that certain Credit Agreement, dated
April 19, 2006 (the “Credit Agreement”), as amended by that certain First
Amendment to Credit Agreement and Ratification of Loan Documents, by and among
the Bank (as defined herein), the Borrower and the Guarantor (as defined
herein), dated as of June 28, 2007 (the “Amendment”), and the Loan
Documents (as defined in the Amendment) executed or to be executed by and
between the Borrower and OLD
NATIONAL BANK,
(hereinafter referred to as “Bank”), the receipt and sufficiency of which
consideration is hereby acknowledged, and as an inducement to the Bank to extend
such financial accommodations to the Borrower, the undersigned, HALLADOR
PETROLEUM COMPANY,
a
Colorado corporation (hereinafter referred to as “Guarantor”), hereby guaranties
the full and complete payment, when due, whether at maturity, by acceleration
or
otherwise, of any and all indebtedness of the Borrower to the Bank pursuant
to
the Credit Agreement, as amended, that certain Amended and Restated Line of
Credit Note, dated of even date herewith, payable to the order of the Bank
in
the original aggregate principal amount of Forty Million and No/100 Dollars
($40,000,000.00) and that certain Term Loan Note to be executed and delivered
by
the Borrower in favor of the Bank at a future date as specified in the Credit
Agreement (collectively the “Note”) and all extensions, renewals,
re-amortizations, restatements, modifications and amendments thereof, together
with all costs, expenses and attorneys’ fees (the above-described obligations
and liabilities are hereinafter referred to as “Liabilities”).
If
a
Default (as such term is defined in the Credit Agreement) exists under the
Credit Agreement, then immediately upon written demand by the Bank, the
Guarantor shall pay the Liabilities as if such Liabilities constituted the
direct and primary debts and obligations of the Guarantor. Except as provided
herein, the Bank shall not be required to make any demand upon or pursue or
exhaust any of its rights or remedies against the Borrower or others, including,
without limitation, other guarantors, with respect to the payment or performance
of any of the Liabilities or to pursue or exhaust any of its rights or remedies
with respect to any collateral held by the Bank.
This
Guaranty shall remain fully enforceable irrespective of any defenses which
the
Borrower may assert on the underlying Liabilities (other than the defense of
payment of the Liabilities), including, without limitation, the failure of
consideration, breach of warranty, statute of frauds, statute of limitations,
accord and satisfaction, and usury.
This
Guaranty shall be secured by Guarantor’s assignment of its indirect interest in
the Gas Contract (as such term is defined
in the
Credit Agreement), as evidenced by that certain Collateral Assignment of Gas
Well Rights in favor of the Bank, dated as of April 19, 2006, and upon the
disposition of Guarantor’s indirect interest in the Gas Contract, $1,800,000 of
the proceeds from the disposition of such interest, or all of such proceeds
if
less than such amount, to be deposited into an account with the
Bank.
This
Guaranty shall continue in force with respect to the Guarantor until the Bank
receives written notice of the Guarantor’s election not to guaranty any new
Liabilities arising after receipt of such notice. Any such notice shall not
in
any way affect or limit either (i) the promise of the Guarantor giving such
notice to pay all Liabilities existing at the time such notice is received
by
the Bank or (ii) the promises, obligations and undertakings of the
remaining guarantors, if any, with respect to any Liabilities, including without
limitation, those arising after the date of such notice. Regardless of when
a
renewal or extension of pre-termination Liabilities occurs (with or without
adjustment of interest rate or other terms), the Liabilities shall be deemed
to
have been incurred prior to the termination to the extent of the renewal or
extension and to be fully covered and included within this
Guaranty.
The
Guarantor waives (a) notice to the Guarantor or the Borrower or other
guarantors of (i) acceptance of this Guaranty by the Bank, (ii) the
Borrower incurring additional Liabilities, and (iii) the amount of the
Liabilities at any time outstanding; (b) except as provided herein,
presentment for payment, demand, protest, notice to the Guarantor, the other
guarantors or the Borrower of dishonor, nonpayment, default and non-performance
with respect to any of the Liabilities; (c) the right to require proration
among the Guarantor and other guarantors; (d) any and all rights to require
the Bank to marshal assets of the Borrower or any other guarantor or other
party
providing any security for the Liabilities; (e) any defense which the
Borrower or other guarantors have against the Bank other than payment;
(f) all defenses given to sureties or guarantors at law or in equity other
than payment; and (g) all errors and omissions in connection with the
Bank’s administration of the Liabilities, except actions or inactions which
amount to bad faith, gross negligence or
willful misconduct. All remedies or actions by the Bank for payment or
fulfillment of the Liabilities are cumulative and the pursuit of one shall
not
preclude the exercise of any other rights or remedies.
The
Guarantor hereby grants to the Bank full power, in its uncontrolled discretion
and without notice to the Guarantor, the other guarantors or the Borrower,
to
deal in any manner with the Liabilities, including, without limitation, the
following powers: (a) to modify or otherwise change any terms of the
Liabilities, or the rate of interest thereon, or to grant any extension or
renewal thereof, and any other indulgence with respect thereto, and to effect
any release, compromise, or settlement with respect thereto, all in accordance
with the terms of the Loan Documents; (b) to forbear from enforcing payment
or any term of the Liabilities; or (c) to release any other guarantor or
surety of the Liabilities; provided, however, that (i) the Guarantor shall
not be liable for any increase in debt, interest rate, or fees unless approved
in writing by Guarantor; and (ii) the Bank shall not release any Collateral
unless approved in writing by Guarantor. The obligations of the Guarantor
hereunder shall not be released, discharged, or in any way affected, nor shall
the Guarantor have any rights or recourse against the Bank by reason of any
action the Bank may take, omit to take, or delay in taking under the foregoing
powers. The obligations of the Guarantor under this Guaranty shall be joint
and
several obligations of the Guarantor and any other guarantors (now existing
or
hereafter arising) of the obligations of the Borrower to the Bank.
Without
limiting the foregoing waivers by the Guarantor of right to notice, and without
obligating the Bank to follow the following procedure if demand is made after
the occurrence of a Default, the Bank may at any time demand payment from the
Guarantor by mailing to the Guarantor written demand therefor addressed to
any
address set forth below and the Guarantor agrees that the sending of such
written demand as herein provided shall be sufficient demand for payment
hereunder.
Any
notice required or permitted to be given under this Guaranty may be, and shall
be deemed effective if made in writing and delivered to the recipient’s address,
telex number or facsimile number addressed to Borrower, Guarantor or Bank at
the
addresses indicated below, or as changed or modified in writing delivered to
the
other hereafter, by any of the following means: (a) hand delivery,
(b) United States first class mail, postage prepaid, (c) registered or
certified mail, postage prepaid, with return receipt requested, (d) by a
reputable overnight delivery service, or (e) by telegraph or telex when
delivered to the appropriate office for transmission, charges prepaid, with
request for assurance of receipt in a manner typical with respect to
communication of that type. Notice made in accordance with this paragraph shall
be deemed given upon receipt if delivered by hand or wire transmission, three
(3) Banking Days after mailing if mailed by first class, registered or certified
mail, or one (1) Banking Day after deposit with an overnight courier service
if
delivered by overnight courier. Borrower, Guarantor and Bank may each change
the
address for service of notice upon it by a notice in writing to the other
parties hereto.
If
to the
Bank:
Old
National Bank
0
Xxxx
Xxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxx 00000
Attn:
Xxx
Xxxxxxxx, Vice President
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With
a
copy
Xxxxxxx
XxXxxx LLP
(which
shall
2700
Market Tower
not
constitute
00
Xxxx
Xxxxxx Xxxxxx
notice
here-
Xxxxxxxxxxxx,
Xxxxxxx 00000-0000
under)
to: Attn:
Xxxxx X. Xxxxxx, Esq.
Facsimile:
(000) 000-0000
If
to the
Guarantor: Hallador
Petroleum Company
0000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attn:
Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
With
copies
Xxxxxx,
Xxxxx & Bockius LLP
(which
shall
000
Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000
not
constitute
Xxx
Xxxxxxx, XX 00000
notice
here-
Attn:
Xxxxxx X. Xxxxx, Esq.
under)
to:
Facsimile:
(000) 000-0000
Whenever
possible, each provision of this Guaranty shall be interpreted in such a manner
as to be effective and valid under applicable law, but if such provision shall
be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or remaining provisions of this
or
any related agreement or instrument.
Notwithstanding
any other terms or conditions set forth in this Guaranty, the Guarantor
subordinates (until such time as the Bank has been paid in full with respect
to
the Liabilities) any claim or other right which it might now have or hereafter
acquire against the Borrower or any other person that is primarily or
contingently liable on the Liabilities that arise from the existence or
performance of the Guarantor’s obligations under the Guaranty, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or remedy
of the Bank against the Borrower or any collateral security therefore which
the
Bank now has or hereafter acquires, whether or not such claim, remedy, or right
arises in equity, or under contract, statute, or common law.
After
the
occurrence of a default under the Loan Documents, Guarantor shall have the
right
(but not the obligation) to purchase the Liabilities, which exist at the time
of
such default at a price equal to the outstanding amount of such Liabilities
(the
“Purchase Price”), and the Bank shall be obligated to sell such Liabilities on
the terms and conditions set forth herein. The Liabilities may be purchased
by
Guarantor upon the following terms:
(a) The
Purchase Price shall be payable to Guarantor in immediately available funds
within ten (10) days after Guarantor notifies the Bank in writing of its
election to purchase the Liabilities;
(b) The
transfer of title to the Liabilities shall be evidenced by a loan assignment
agreement and such other agreements, notices, and documents as Guarantor
reasonably requests to complete and sale the assignment of all of the Bank’s
right, title, and interest in and to the Liabilities and all collateral securing
such Liabilities; provided that such sale and assignment shall be without
recourse and without representation or warranty (express or implied) whatsoever;
and
(c) The
Bank
shall sell and assign the Liabilities, together with all collateral for such
liabilities, free and clear of any rights or participants or other parties
in
such Liabilities and collateral.
The
Guarantor represents to and for the benefit of the Bank, upon which the Bank
is
entitled to rely and the Guarantor acknowledges that the Bank is relying, that
(i) the execution, delivery, and performance hereof will not violate any
law or any other material contract, agreement, or understanding which is binding
upon the Guarantor; (ii) this Guaranty is the valid and binding obligation
of the Guarantor, enforceable in accordance with its terms; and (iii) the
financial statements of the Guarantor provided as of the date hereof and to
be
provided hereafter to the Bank are and will be true, accurate, and complete,
have been and will continue to be prepared on a consistent basis, and currently
and will continue to fairly present the financial position of the Guarantor
as
of the date hereof and as of the dates of such future financial statements
of
the Guarantor delivered to the Bank.
While
the
Liabilities are outstanding, the Guarantor agrees: (a) to provide true and
correct copies of any and all filings made by it with the SEC, including without
limitation, all 10-K and 10-Q filings within twenty four (24) hours of filing;
(b) to maintain a Maximum Unsubordinated Debt to Tangible Net Worth Ratio
(as such ratio is defined in the Amendment) to 2.00 to 1.00, which may be
measured at any time; and (c) except to the extent required by law, to not
create, incur or suffer to exist any lien on the limited partnership interests
in Savoy Energy Limited Partnership owned by Guarantor. Guarantor’s failure to
do any of the foregoing shall be a Default under the terms of the Credit
Agreement.
The
Guarantor acknowledges that (i) the Guarantor is capable of and responsible
for obtaining information on and keeping informed as to all aspects of the
Borrower’s business, including, without limitation, its financial affairs and
business prospects, and the status of the Liabilities from time to time and
(ii) the Bank has no responsibility to so inform the
Guarantor.
The
Guarantor acknowledges that separate guaranties may be given in connection
with
the Liabilities (including other guaranties by the Guarantor) and this Guaranty
shall not be modified, amended, limited (other than in accordance with the
terms
hereof) or extinguished if one or more of the terms of the other guaranty
agreements differ from those of this Guaranty or are subsequently amended,
modified, limited, and extinguished. The execution of this Guaranty shall not
affect the validity or enforceability of any existing guaranties, which
guaranties shall remain in full force and effect. All obligations hereunder
shall continue, notwithstanding the incapacity or lack of authority of the
other
guarantors, and any failure by the Bank to file, pursue, or enforce a claim
against any of the other guarantors, or any waiver, release, consent, or other
accommodation given or provided to any of the other guarantors, shall not
operate to release the Guarantor or other guarantors from liability hereunder,
or limit the rights of the Bank against the Guarantor or any other guarantor.
The failure of any other person to sign this Guaranty or any other guaranty
shall not release or affect the liability of the signer hereof. The Loan
Documents have been submitted to the Guarantor for examination, and the
Guarantor acknowledges that, by execution of this Guaranty, the Guarantor has
reviewed and approved the Loan Documents.
This
writing is intended by the parties hereto as a final expression of this Guaranty
and is also intended as a complete and exclusive statement of the terms of
that
agreement. No course of dealing, course of performance or trade usage, and
no
parole evidence of any nature, shall be used to supplement or modify any terms
hereof.
The
Guarantor further agrees that, to the extent that the Borrower makes a payment
or payments to the Bank, or the Bank receives any proceeds of collateral, which
payment or payments or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, or otherwise is required to be
repaid to the Borrower, its estate, trustee, receiver or any other party,
including, without limitation, under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
the Liabilities or part thereof which has been paid, reduced, or satisfied
by
such amount shall be reinstated and continued in full force and effect as of
the
date such initial payment, reduction, or satisfaction occurred. The Guarantor
shall defend and indemnify the Bank from any claim or loss under this paragraph
with respect to the Liabilities, including the Bank’s attorneys’ and paralegal’s
fees and expenses and other expenses in the defense of any such action or
suit.
The
Guarantor agrees that the Guarantor’s responsibility under the Guaranty to pay
to the Bank the Liabilities and any payments thereof repaid as preferences
shall
not be extinguished or modified by any release of the Borrower or other party
primarily liable on the Liabilities, whether by voluntary release, settlement
of
litigation, settlement of a claim not yet resulting in litigation, settlement
of
a preference claim or otherwise. In all events the responsibility of the
Guarantor to pay the Bank and the Bank’s right to recover from the Guarantor the
full amount of the Liabilities shall extend until the Bank has received actual
payment in full in cash, and performance, of all of the Liabilities, without
regard to any modification or a release thereof, and shall continue until such
payment, by the passage of time and the statute of limitations, cannot be
recovered by the Borrower, the Borrower as debtor in possession, a trustee
in
bankruptcy of the Borrower or any other person or organization.
This
Guaranty shall extend to and bind the successors and assigns of the Guarantor.
This Guaranty shall inure to the benefit of all affiliates, transferees,
assignees, and/or endorsees of the Bank of any part or parts or all of the
liabilities and of the Bank’s successors and assigns.
THE
VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
AND
THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF INDIANA, WITHOUT REGARD
TO
PRINCIPLES OF CONFLICTS OF LAW. THE GUARANTOR AGREES THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS GUARANTY SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE COURTS LOCATED IN THE COUNTY OF XXXXXX, STATE OF
INDIANA, OR THE FEDERAL COURTS WHOSE VENUE INCLUDES THE COUNTY OF XXXXX, STATE
OF INDIANA, OR, AT THE SOLE OPTION OF THE BANK, IN ANY OTHER COURT IN WHICH
BANK
SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. THE GUARANTOR AND THE BANK (BY
ITS
ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY, AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) BETWEEN OR AMONG
THE
GUARANTOR AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT,
ANY OTHER RELATED DOCUMENT, OR ANY RELATIONSHIP BETWEEN THE BANK AND THE
GUARANTOR. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE
FINANCING DESCRIBED HEREIN OR IN THE LOAN DOCUMENTS.
This
Guaranty shall terminate and be of no further force and effect upon payment
in
full of the amounts due under the Note.
This
Guaranty amends and restates in its entirety that certain Continuing Guaranty,
dated April 19, 2006, issued by Guarantor in favor of the Bank (the
“Original Guaranty”). All rights, benefits, indebtedness, interest, liabilities
and obligations of the Guarantor are hereby amended, restated and superseded
in
their entirety according to the terms and provisions set forth herein. All
Guarantor’s obligations under the Original Guaranty are hereby renewed and
supplemented by this Guaranty and shall, from and after the date hereof, be
governed by this Guaranty. Effective as of the date hereof, all references
to
the Guaranty in any other Loan Documents shall refer to this Guaranty.
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1-LA/944069.4
IN
WITNESS WHEREOF,
the
undersigned has executed this Amended and Restated Continuing Guaranty effective
as of this 28th day of June, 2007.
By:
/s/
Xxxxxx X. Xxxxxx
Xxxxxx
X.
Xxxxxx, President, Chief Executive
Officer
and Chief Financial Officer
U.S.
Employer Identification Number: 00-0000000