Document:

hnrg_ex10

		
			EXHIBIT 10.1
		

		
			 
		

		
			THIRD AMENDMENT TO THE THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER 
		

		
			This THIRD AMENDMENT TO THE THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER (this "Amendment"), dated as of April 15, 2020, by and among hallador energy company (the "Borrower"), the Guarantors party hereto, the lenders listed on the signature pages hereof (the "Lenders") and PNC BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for the Lenders (the "Administrative Agent") under the Credit Agreement referred to below:
		

		
			WlTNESSETH:
		

		
			WHEREAS, the Borrower, the Lender and the Administrative Agent entered into the Third Amended and Restated Credit Agreement dated as of May 21, 2018, as amended by that certain First Amendment to the Third Amended and Restated Credit Agreement dated as of March 26, 2019, as further amended by that certain Second Amendment to Third Amended and Restated Credit Agreement dated as of September 30, 2019 (and as may be further amended, restated, modified or supplemented, the "Credit Agreement"), pursuant to which the Lenders have extended credit to the Borrower; 
		

		
			WHEREAS, an Event of Default exists under the Credit Agreement because the Borrower obtained a PPP Loan (as defined in the Credit Agreement after giving effect to this Amendment) on or about April 15, 2020 in violation of Section 8.2.1 of the Credit Agreement (the “Known Existing Default”); 
		

		
			WHEREAS, the Borrower has requested that certain amendments be made as set forth in more detail herein and that the Known Existing Default be waived; and
		

		
			WHEREAS, capitalized terms not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.
		

		
			NOW, THEREFORE, in consideration of their mutual covenants and agreements hereafter set forth, and intending to be legally bound, the parties hereto agree as follows:
		

			
	
			
				Article I
			 

			
	
			
				 Section 1.1
			Amendments to Credit Agreement.  The Credit Agreement (other than the Schedules and Exhibits thereto and the Schedules to the Security Agreement, except to the extent as delivered to the Administrative Agent simultaneously with this Amendment) is hereby amended to reflect the modifications set forth in the Credit Agreement attached as Annex A hereto.  

			
	
			
				Article II
			 

			
	
			
				 Section 2.1
			No Other Amendments.  Except as amended hereby, the terms and provisions of the Credit Agreement remain unchanged, are and shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms, and are hereby ratified and confirmed.  Except as expressly provided herein, this Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of any Loan Document, a waiver of any Potential Default or Event of Default under any Loan Document, or a waiver or release of any of the Lenders' or Administrative Agent's rights and remedies (all of which are hereby reserved).

			
	
			
				 Section 2.2
			Waiver of Known Existing Default.    Administrative Agent and the Lenders hereby waive the Known Existing Default.  This waiver shall be effective only for the specific defaults comprising 

		 

		

			 

		

	the Known Existing Defaults, and in no event shall this waiver be deemed to be a waiver of enforcement of Administrative Agent’s or any Lender’s rights with respect to any other Potential Defaults or Events of Default now existing or hereafter arising.  

			
	
			
				 Section 2.3
			Representations and Warranties.  The Borrower hereby represents and warrants to the Lenders and the Administrative Agent that, except for the occurrence of the Known Existing Default, the representations and warranties set forth in Article 6 of the Credit Agreement, are true and correct in all material respects on and as of the date hereof (except for any representation or warranty which was expressly limited to an earlier date, in which case such representation and warranty shall be true and correct in all material respects on and as of such date), and that no Event of Default, or Potential Default, has occurred or is continuing or exists on or as of the date hereof.

			
	
			
				 Section 2.4
			Conditions to Effectiveness.  This Amendment shall become effective upon execution and delivery to the Administrative Agent hereof by the Borrower, all of the Lenders and the Administrative Agent and the satisfaction of the following conditions precedents:

			
	
			
				 (a)
			Amendment.  The Administrative Agent shall have received an executed counterpart of this Amendment from all Lenders, duly executed by a responsible officer of the Loan Parties.

			
	
			
				 (b)
			Officer's Certificate.  The representations and warranties of the Loan Parties contained in Section 6 of the Credit Agreement including as amended by the modifications and additional representations and warranties of this Amendment, and of each Loan Party in each of the other Loan Documents shall be true and accurate in all material respects on and as of the date hereof with the same effect as though such representations and warranties had been made on and as of such date (except representations and warranties which relate solely to an earlier date or time, which representations and warranties shall be true and correct in all material respects on and as of the specific dates or times referred to therein), and each of the Loan Parties shall have performed and complied with all covenants and conditions hereof and thereof, no Event of Default or Potential Default shall have occurred and be continuing or shall exist; and there shall be delivered to the Administrative Agent for the benefit of each Lender a certificate of the Borrower dated the date hereof and signed by the Chief Executive Officer, President, or Chief Financial Officer of the Borrower to each such effect.

			
	
			
				 (c)
			Insurance.  Evidence that adequate insurance, including flood insurance, if applicable, required to be maintained under the Credit Agreement is in full force and effect, with additional insured, mortgagee and lender loss payable special endorsements attached thereto in form and substance satisfactory to the Administrative Agent and its counsel naming the Administrative Agent as additional insured, mortgagee and lender loss payee.

			
	
			
				 (d)
			Secretary's Certificate.  There shall be delivered to the Administrative Agent for the benefit of each Lender a certificate dated the date hereof and signed by the Secretary or an Assistant Secretary of each of the Loan Parties, certifying as appropriate as to:

			
	
			
				 (i)
			all action taken by each Loan Party in connection with this Amendment and the other Loan Documents;

			
	
			
				 (ii)
			the names of the officer or officers authorized to sign this Amendment and the other Loan Documents and the true signatures of such officer or officers and specifying the Authorized Officers permitted to act on behalf of each Loan Party for purposes of this Amendment and the true signatures of such officers, on which the Administrative Agent and each Lender may conclusively rely; and

			
	
			
				 (iii)
			copies of its organizational documents, including its certificate of incorporation and bylaws, certificate of limited partnership and limited partnership agreement or limited liability company certificate and operating agreement, as the case may be, as in effect on the date hereof and, in the case of the 

		 

		

			 

		

	certificate of incorporation of the Borrower, certified by the appropriate state official where such document is filed in a state office (or, in the event that no change has been made to such organizational documents previously delivered to the Administrative Agent, so certified by the Secretary or Assistant Secretary of such Loan Party), together with certificates from the appropriate state officials as to the continued existence and good standing of the Borrower in the state of its formation and the state of its principal place of business.

			
	
			
				 (e)
			No Defaults under Other Obligations.  No default under any note, credit agreement or other document relating to existing Indebtedness of any of the Loan Parties shall occur as a result of this Amendment.

			
	
			
				 (f)
			No Actions or Proceedings.  No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, this Amendment, the other Loan Documents or the consummation of the transactions contemplated hereby or thereby or which, in the Administrative Agent's sole discretion, would make it inadvisable to consummate the transactions contemplated by this Amendment or any of the other Loan Documents.

			
	
			
				 (g)
			Consents.  All material consents required to effectuate the transactions contemplated by this Amendment and the other Loan Documents and shall have been obtained.

			
	
			
				 (h)
			Confirmation of Guaranty.  Each of the Guarantors confirms that they have read and understand the Amendment.  In order to induce the Lenders, the Administrative Agent and the other Agents to enter into the Amendment, each of the Guarantors: (i) consents to the Amendment and the transactions contemplated thereby; (ii) ratifies and confirms each of the Loan Documents to which it is a party; (iii) ratifies, agrees and confirms that it has been a Guarantor and a Loan Party at all times since it became a Guarantor and a Loan Party and from and after the date hereof, each Guarantor shall continue to be a Guarantor and a Loan Party in accordance with the terms of the Loan Documents, as the same may be amended in connection with the Amendment and the transactions contemplated thereby; and (iv) hereby ratifies and confirms its obligations under each of the Loan Documents (including all exhibits and schedules thereto), as the same may be amended in connection with the Amendment and the transactions contemplated thereby, by signing below as indicated and hereby acknowledges and agrees that nothing contained in any of such Loan Documents is intended to create, nor shall it constitute an interruption, suspension of continuity, satisfaction, discharge of prior duties, novation or termination of the indebtedness, loans, liabilities, expenses, guaranty or obligations of any of the Loan Parties under the Credit Agreement or any other such Loan Document.

			
	
			
				 (i)
			Legal Details.  All legal details and proceedings in connection with the transactions contemplated by this Amendment and the other Loan Documents shall be in form and substance satisfactory to the Administrative Agent and counsel for the Administrative Agent, and the Administrative Agent shall have received all such other counterpart originals or certified or other copies of such documents and proceedings in connection with such transactions, in form and substance satisfactory to the Administrative Agent and its counsel, as the Administrative Agent or its counsel may reasonably request.  Without limiting the generality of the foregoing, the Loan Parties and Lenders hereby (i) agree that, for all purposes of this Amendment, electronic images of this Amendment or any other Loan Documents (in each case, including with respect to any signature pages thereto) shall have the same legal effect, validity and enforceability as any paper original, and (ii) waive any argument, defense or right to contest the validity or enforceability of the Amendment or any other Loan Documents based solely on the lack of paper original copies of  such Amendment and Loan Documents, including with respect to any signature pages thereto.

			
	
			
				 (j)
			Fees.  The Borrower shall have paid all fees, costs and expenses for which the Administrative Agent and the Lenders are entitled to be paid or reimbursed in accordance with the fee letter 

		 

		

			 

		

	dated March 25, 2020, between the Borrower and the Administrative Agent, including but not limited to the fees and expenses of the Administrative Agent's legal counsel.     

			
	
			
				 Section 2.5
			Miscellaneous.

			
	
			
				 (a)
			This Amendment shall become effective as provided in Section 2.4.

			
	
			
				 (b)
			The Credit Agreement, as amended by this Amendment, is in all respects ratified, approved and confirmed, and shall, as so amended, remain in full force and effect.  From and after the date that the amendments herein described take effect, all reference to the "Agreement" in the Credit Agreement and in the other Loan Documents, shall be deemed to be references to the Credit Agreement as amended by this Amendment.

			
	
			
				 (c)
			This Amendment shall be deemed to be a contract under the laws of the Commonwealth of Pennsylvania, and for all purposes shall be governed by, construed and enforced in accordance with the laws of said Commonwealth.

			
	
			
				 (d)
			Except as amended hereby, all of the terms and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect.  Borrower, the other Loan Parties, each Lender, and Administrative Agent acknowledge and agree that this Amendment is not intended to constitute, nor does it constitute, a novation, interruption, suspension of continuity, satisfaction, discharge or termination of the obligations, loans, liabilities, or indebtedness under the Credit Agreement or the other Loan Documents.

			
	
			
				 (e)
			This Amendment may be executed in any number of counterparts by the different parties hereto on separate counterparts.  Each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one in the same instrument.

		
			[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Amendment as of the day and year first above written.
		

		
			BORROWER:
		

		
			 
		

		
			HALLADOR ENERGY COMPANY
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  Chief Financial Officer
		

		
			GUARANTORS:
		

		
			SUNRISE COAL, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			SUMMIT TERMINAL, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  Vice President
		

		
			SUNRISE LAND HOLDINGS, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			SUNRISE ADMINISTRATIVE SERVICES, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			SYCAMORE COAL, INC.
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			 
		

		
			EDWARDSPORT CONSTRUCTION COMPANY, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			GIBSON COUNTY LOGISTICS, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			 
		

		
			SFI COAL SALES, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			OAKTOWN FUELS MINE NO. 1, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			 
		

		
			OAKTOWN FUELS MINE NO. 2, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			PROSPERITY MINE, LLC
		

		
			By:/S/LAWRENCE D. MARTIN 
Name:  Lawrence D. Martin
Title:  President
		

		
			RAILPOINT SOLUTIONS, LLC
		

		
			By:/S/HEATHER L. TRYON
Name:  Heather L. Tryon
Title:  Manager
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			PNC BANK, NATIONAL ASSOCIATION, individually and as Administrative Agent 
		

		
			By:/S/KYLE HELFRICH
Name:  Kyle Helfrich
Title:  Vice President
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			THE HUNTINGTON NATIONAL BANK
		

		
			By:/S/PHIL ANDRESON
Name: Phil Andreson
Title: Vice President 
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			UMB BANK, N.A.
		

		
			By: /S/ DAVID WALTERS
Name:  David Walters
Title:  SVP
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			KEYBANK NATIONAL ASSOCIATION
		

		
			By:/S/CHRISTOPHER A. SUSOTT
Name: Christopher A. Susott
Title:  SVP
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			OLD NATIONAL BANK
		

		
			By:/S/DANIEL G. GMELICH
Name:  Daniel G. Gmelich
Title:  SVP
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			FIRST HORIZON BANK
		

		
			By: /S/SHARON SHIPLEY
Name:  Sharon Shipley
Title:  Senior Vice President
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			FIRST FINANCIAL BANK, N.A.
		

		
			By: /S/DAN LAUGHNER
Name: Dan Laughner
Title:  Vice President
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			CHEMICAL BANK, a division of TCF National Bank
		

		
			By:/S/ ROBERT ROSATI
Name:    Robert Rosati
Title:  Senior Vice President
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			FIRST MERCHANTS BANK
		

		
			By:/S/ ADAM TREIBIC
Name:  Adam Treibic
Title:  Vice President
		

		
			

		 

		

			 

		

[SIGNATURE PAGE TO THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER]
		

		
			 
		

		
			IROQUOIS FEDERAL SAVINGS & LOAN ASSOCIATION
		

		
			By:/S/THOMAS J. CHAMBERLAIN
Name:  Thomas J. Chamberlain
Title:  Executive Vice President and Chief Lending Officerhnrg_ex10_2

		

			

		

			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

		
			
		

		
			Exhibit 10.2
		

		
			 
		

		
			
		

		
			NOTE
		

		
			 
		

			
					
						1.

					
						 

					
					
						 

				
	
					
						 

					
						SBA Loan #

					
					
						70216270-04

				
	
					
						SBA Loan Name

					
					
						Hallador Energy Company

				
	
					
						 

					
						Date

					
					
						04/16/20

				
	
					
						 

					
						Loan Amount

					
					
						$ 10,000,000.00

				
	
					
						 

					
						Interest Rate

					
					
						 

					
						The interest rate is 1.00% per year.

				
	
					
						Borrower

					
					
						Hallador Energy Company

				
	
					
						Operating Company

					
					
						 

				
	
					
						Lender

					
					
						First Financial Bank, N.A.

				

		
			 
		

			
	
			
				 1)
			

			
	
			
			PROMISE TO PAY:

		
			 
		

		
			In return for the Loan, Borrower promises to pay to the order of Lender the amount of
		

		
			 
		

		
			TEN MILLION Dollars, interest on the unpaid principal balance, and all other amounts required by this Note.
		

		
			 
		

			
	
			
				 2)
			

			
	
			
			DEFINITIONS:

		
			“Collateral” means any property taken as security for payment of this Note or any guarantee of this Note. “Guarantor” means each person or entity that signs a guarantee of payment of this Note.
		

		
			 
		

		
			“Loan” means the loan evidenced by this Note.
		

		
			 
		

		
			“Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.
		

		
			 
		

		
			“SBA” means the Small Business Administration, an Agency of the United States of America.
		

		
			
		

		
			

		 

		

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			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

		

		
			 
		

			
	
			
				 3)
			

			
	
			
			PAYMENT TERMS: 

		
			Borrower must make all payments at the place Lender Designates. The payment terms for this Note are:
		

		
			 
		

			
	
			
				 a)
			

			
	
			
			Maturity: This Note will mature in 2 years from the date of this Note (“Maturity Date”).

		
			 
		

			
	
			
				 b)
			

			
	
			
			Repayment Terms:

		
			The interest rate is 1.00% per year. Interest shall accrue commencing with the date of this Note (“Note Date”) and shall be computed on the outstanding principal on a 365/365 basis.
		

		
			 
		

		
			No principal or interest payments shall be due for the first six (6) months of this Note, however, interest will continue to accrue during this period. Commencing on the seventh (7th) month anniversary of the Note Date and continuing on the same day of each month thereafter, Borrower shall make a monthly principal payment on the outstanding principal balance (after application of any loan forgiveness) in an amount that shall fully amortize the outstanding principal balance of the Loan by the Maturity Date. Accrued interest shall be due and payable with each monthly principal payment. Lender will apply each installment payment first to pay interest accrued to the day Lender received the payment, then to bring principal current, and apply any remaining balance to reduce principal. The Note is payable in full on the Maturity Date without further demand or action of the Lender.
		

		
			 
		

		
			Loan Prepayment: Borrower may prepay this Note at any time without penalty.
		

		
			 
		

			
	
			
				 c)
			

			
	
			
			Paycheck Protection Program: The Loan is being made by Lender to Borrower pursuant to the Paycheck Protection Program (“PPP”), which is part of the Coronavirus Aid, Relief, and Economic Security Act (“Act”), and the provisions of the Act and the rules, regulations, and guidance applicable to loans under the PPP, as amended from time to time (“Rules”), are incorporated herein by reference. If a conflict exists between the terms of the Loan Documents and the Act or Rules, the Act or Rules will control and the terms of the Loan Documents will be amended by the effect and operation of the Act or Rules so that the legal effect of the Loan Documents conforms to the provisions of the Act and Rules, and the Loan Documents as amended shall remain in full force and effect in accordance with the Act and Rules. If all or part of any term of the Loan Documents is disallowed or impermissible under the Act or Rules, such term shall be deemed to be stricken from the Loan Documents, and the Loan Documents as amended shall remain in full force and effect in accordance with the Act and Rules. Borrower represents and warrants that it will use the Loan proceeds in compliance with the Act and Rules and only for permissible costs and expenses under the Act and Rules. Borrower represents and warrants that all representations, authorizations, and certifications made by Borrower in its application for the Loan under the PPP are true, accurate, and correct as of the date hereof.

		
			 
		

			
	
			
				 d)
			

			
	
			
			Loan Forgiveness: All or part of the Loan may be forgiven if Borrower satisfies and complies with the terms and conditions for loan forgiveness under the Act and Rules. All loan forgiveness amounts must be calculated in accordance with the Act and Rules. Borrower agrees to submit to Lender verifying documentation for loan forgiveness in accordance with the Act and Rules. All such verifying documents shall be true and accurate in all material respects. No loan forgiveness will be available absent submission of the required verifying documentation. Borrower agrees to submit all verifying documentation to Lender no later than ninety (90) days from disbursement of the Loan, unless such a requirement is contrary to law or regulation, in which case which case Borrow shall submit all verifying documentation to Lender no later than thirty (30) days after Lender’s request.

		
			 
		

			
	
			
				 e)
			

			
	
			
			No Lender Fees: Notwithstanding any terms to the contrary, Lender shall not collect any fees or costs from Borrower relating to this Loan.

		
			

		 

		

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			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

		

		
			 
		

			
	
			
				 f)
			

			
	
			
			No Collateral or Guarantee: Notwithstanding any term to the contrary, no collateral and no personal guarantee is required in connection with the Loan.

		
			 
		

		
			 
		

			
	
			
				 g)
			

			
	
			
			Non-Recourse. Lender and SBA shall have no recourse against any individual shareholder, member or partner of Borrower for non-payment of the Loan, except to the extent that such shareholder, member, or partner uses the loan proceeds for an unauthorized purpose.

		
			 
		

			
	
			
				 h)
			

			
	
			
			Assignability: Borrower may not assign its rights in or delegate its duties under this Note without the prior written consent of Lender. Lender may assign its rights in or delegate its duties under this Note at any time without the consent of or notice to Borrower.

		
			 
		

			
	
			
				 i)
			

			
	
			
			Interpretation: The terms of this Section 3 shall control over any terms in this Note.

		
			 
		

			
	
			
				 j)
			

			
	
			
			Additional Documentation: At the request of Lender, Borrower agrees to promptly re- execute this Note and any other Loan Document if the Loan was closed using a copy and/or to execute a replacement note and other Loan Documents as Lender may deem necessary or appropriate, in its sole discretion, to comply with the Act or Rules.

		
			 
		

			
	
			
				 k)
			

			
	
			
			Borrower Certifications: Borrower further represents, warrants, and certifies to Lender (a) Borrower acknowledges that if Borrower defaults on the Loan, SBA may be required to pay Lender under the SBA Guarantee under the PPP, and SBA may then seek recovery on the Loan (to the extent any balance remains after loan forgiveness), (b) Borrower will keep books and records in a manner satisfactory to Lender, furnish financial statements as requested by Lender, and allow Lender and SBA to inspect and audit books, records and papers relating to Borrower’s financial or business condition, (c) if the Borrower is other than an individual, the Borrower and the individual signing on behalf of the Borrower, represents and warrants that the individual signing on behalf of the Borrower has authority to act on behalf of the Borrower and has been duly and properly authorized to sign this Note on behalf of the Borrower; and (d) Borrower will not, without Lender’s consent, changes its ownership structure, make any distribution of company assets that would adversely affect its financial condition, or transfer (including pledging) or dispose of any assets, except in the ordinary course of business.

		
			 
		

			
	
			
				 3)
			

			
	
			
			DEFAULT: 

		
			Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:
		

		
			 
		

			
	
			
				 a)
			

			
	
			
			Fails to do anything required by this Note and other Loan Documents;

			
	
			
				 b)
			

			
	
			
			Defaults on any other loan with Lender;

			
	
			
				 c)
			

			
	
			
			Does not preserve, or account to Lender’s satisfaction for, any of the Collateral or its proceeds;

			
	
			
				 d)
			

			
	
			
			Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

			
	
			
				 e)
			

			
	
			
			Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

			
	
			
				 f)
			

			
	
			
			Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower’s ability to pay this Note;

			
	
			
				 g)
			

			
	
			
			Fails to pay any taxes when due;

			
	
			
				 h)
			

			
	
			
			Becomes the subject of a proceeding under any bankruptcy or insolvency law;

			
	
			
				 i)
			

			
	
			
			Has a receiver or liquidator appointed for any part of their business or property;

			
	
			
				 j)
			

			
	
			
			Makes an assignment for the benefit of creditors;

			
	
			
				 k)
			

			
	
			
			Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s ability to pay this Note;

		
			
		

		
			

		 

		

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			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

		

			
	
			
				 l)
			

			
	
			
			Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender’s prior written consent; or

			
	
			
				 m)
			

			
	
			
			Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to pay this Note.

		
			 
		

			
	
			
				 4)
			

			
	
			
			LENDER’S RIGHTS IF THERE IS A DEFAULT:

		
			Without notice or demand and without giving up any of its rights, Lender may:
		

		
			 
		

			
	
			
				 a.
			

			
	
			
			Require immediate payment of all amounts owing under this Note;

			
	
			
				 b.
			

			
	
			
			Collect all amounts owing from any Borrower or Guarantor;

			
	
			
				 c.
			

			
	
			
			File suit and obtain judgment;

			
	
			
				 d.
			

			
	
			
			Take possession of any Collateral; or

			
	
			
				 e.
			

			
	
			
			Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

		
			 
		

			
	
			
				 5)
			

			
	
			
			LENDER’S GENERAL POWERS:

		
			Without notice and without Borrower’s consent, Lender may:
		

		
			 
		

			
	
			
				 a.
			

			
	
			
			Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

			
	
			
				 b.
			

			
	
			
			Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

			
	
			
				 c.
			

			
	
			
			Release anyone obligated to pay this Note;

			
	
			
				 d.
			

			
	
			
			Compromise, release, renew, extend or substitute any of the Collateral; and

			
	
			
				 e.
			

			
	
			
			Take any action necessary to protect the Collateral or collect amounts owing on this Note.

		
			 
		

			
	
			
				 6)
			

			
	
			
			WHEN FEDERAL LAW APPLIES:

		
			When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.
		

		
			 
		

			
	
			
				 8)
			

			
	
			
			SUCCESSORS AND ASSIGNS:

		
			Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns.
		

		
			 
		

			
	
			
				 9)
			

			
	
			
			GENERAL PROVISIONS:

			
	
			
				 a)
			

			
	
			
			All individuals and entities signing this Note are jointly and severally liable.

			
	
			
				 b)
			

			
	
			
			Borrower waives all suretyship defenses.

			
	
			
				 c)
			

			
	
			
			Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender’s liens on Collateral.

			
	
			
				 d)
			

			
	
			
			Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

			
	
			
				 e)
			

			
	
			
			Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

			
	
			
				 f)
			

			
	
			
			If any part of this Note is unenforceable, all other parts remain in effect.

		
			
		

		
			

		 

		

			Page 4 of 5

		

		

			 

		

		

			

		

			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

			DocuSign Envelope ID: 816A6944-2A86-40D5-8A2C-5D9161CF89EC

		

		

		

			
	
			
				 g)
			

			
	
			
			To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale.

		
			 
		

			
	
			
				 10)
			

			
	
			
			STATE SPECIFIC PROVISIONS: N/A

		
			 
		

			
	
			
				 11)
			

			
	
			
			BORROWER’S NAME(S) AND SIGNATURE(S):

		
			 
		

		
			By signing below, each individual or entity becomes obliged under this Note as Borrower. 
		

		
			 
		

		
			BORROWER:  HALLADOR ENERGY COMPANY
		

		
			 
		

		
			BY: /S/LAWRENCE D. MARTIN
		

		
			Lawrence D Martin
		

		
			CFO
		

		 

		

			Page 5 of 5

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