THIS CREDIT AGREEMENT, dated as of March 10, 1999, is by and among SANTA BARBARA
PARTNERS, an Oklahoma general partnership ("SBP''), and HALILADOR PETROLEUM, LLP, a Colorado
limited partnership ("Hallador"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association
("USB"). SBP and Hallador are herein collectively called "Borrowers."
Borrowers and USB wish to enter into this Credit Agreement in order to provide for the terms upon which USB
will make advances to Borrowers and issue letters of credit upon the request of Borrowers and by which such
advances and letters of credit will be governed and repaid.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
DEFINITIONS AND REFERENCES
Section 1.1. Defined Terms. As used in this Agreement, each of the following terms has the meaning given it in
this Section 1.1 or in the sections and subsections referred to below:
"Advance" means an oil and Gas Advance or a Securities Advance.
"Affiliate" means each Person that directly or indirectly (through one or more intermediaries or otherwise)
controls, is controlled by, or is under common control with, any Borrower; provided that, for the purposes of this
definition, a Person shall be deemed to control another entity if the controlling Person possesses, directly or
indirectly, the power to direct or control the direction of the management and policies of such entity, whether
through the ownership of stock or other interests therein, by contract or otherwise, and shall include without
limitation any controlling shareholder or owner thereof.
"Agreement" means this Credit Agreement.
"Borrowers" means SBP and Hallador.
"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 a