The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Dated as of June 22, 1999
Petroleum Development Corporation
000 X. Xxxx Xxxxxx
X.X. Xxx 00
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxxx
Re: First Amendment to Credit Agreement
Ladies and Gentlemen:
ARTICLE I. Amendments. Upon the conditions set forth in Article III being
fulfilled, the Credit Agreement dated as of March 13, 1997 (the "Credit
Agreement"), between Petroleum Development Corporation (the "Company"), and The
First National Bank of Chicago (the "Bank"), shall be amended as follows:
1.1 I 1 The pricing matrix in the definition of "Applicable LIBOR Rate
Margin" in Section 1. 1 shall be deleted and replaced with the following pricing
matrix:
LIBOR Rate
Percentage of Borrowing Base Used Margin
Less than 25% 1.00%
Greater than or equal to 25% but less than 50% 1.25%
Greater than or equal to 50% but less than 75% 1.50%
Greater than or equal to 75% 1.75%
1.2 The definition of "First Amendment Date" is added to Section 1.1, to
read as follows:
"First Amendment Date" shall mean June 22. 1999.
1.3 The definition of "Termination Date" in Section 1.1 shall be amended
and restated, to read as follows:
"Termination Date" shall mean the earlier to occur of (a) December
31, 2002, and (b) the date on which the Commitment shall be terminated pursuant
to Section 2.2 or S.2.
1.4 Section 4.4(a) is amended and restated, to read as follows:
Petroleum Development corporation
Dated as of June 22, 1999
Page 2
(a) The Company agrees to pay to the Bank a commitment fee
computed at the rate of one-quarter of one percent (0.25%) per annum on
the amount by which the Commitment exceeds the aggregate outstanding
principal amount of the Advances and any Rate Hedging Obligations, for the
period from the Effective Date until the Termination Date. This fee shall
be paid quarterly in arrears, on the last Business Day of each January,
April, July, and October and on the Termination Date, commencing on such
date after the Effective Date.
1.5 Section 4.4(d) is amended and restated, to read as follows:
(d) The Company agrees to pay to the Bank a facility fee each time
the Bank increases the amount of the Commitment pursuant to Section 2.3 of this
Agreement, which facility fee shall be computed at the rate of one-quarter of
one percent (0.25%) of the amount by which the Bank increases the amount of the
Commitment.
1.6 Section 7.2(a) is amended and restated, to read as follows:
(a) Tangible Net Worth. Permit or suffer the Consolidated
Tangible Net Worth of the Company and its Subsidiaries to be less than (1)
$45,000,000 at any time during the period from and including the First
Amendment Date to and including December 31, 1999, and (ii) the sum of
$45,000,000 plus an amount equal to 50% of the Consolidated Net Income of
the Company and it Subsidiaries for each fiscal year of the Company
thereafter, to be added as of the end of each fiscal year commencing with
the fiscal year ending December 31, 2000, provided that if the
Consolidated Net Income of the Company and its Subsidiaries negative in
any fiscal year. the amount added for such fiscal year shall be zero.
1.7 1.7 The Bank shall adjust the Borrowing Base to equal $22,000,000
from and after the First Amendment Date, and the Bank does not now anticipate
redetermining the Borrowing Base before June 1, 2000, absent the earlier
occurrence of a Default or Event of Default, or the Company selling material
assets included in calculating the Borrowing Base.
1.8 Schedule 6.17 shall be amended and restated, to read as set forth on
Schedule 6.17 attached hereto.
ARTICLE II. Representations and Warranties. In order to induce the Bank to
amend the Credit Agreement as set forth herein, the Company represents and
warrants as follows:
2.1. The representations and warranties contained in the Credit Agreement
and in each other document executed and delivered in connection therewith are
true and correct as of the date hereof, as if such representations and
warranties were made on and as of the date hereof.
Petroleum Development Corporation
Dated as of June 22, 1999
Page 3
2.2. No Default or Event of Default under the Credit Agreement exists or
has occurred and is continuing on the date hereof, both before and after giving
effect to this letter amendment, other than defaults which have been cured as of
the date of execution hereof by the Company.
ARTICLE III. Conditions of Effectiveness. This Amendment shall not become
effective until each of the following has been satisfied:
3.1 The Company delivers to the Bank copies of resolutions adopted by
the Board of Directors of the Company, certified by an officer of the Company as
being true and correct and in fill force and effect, without amendment as of the
date hereof, authorizing the Company to enter into this Amendment and any other
documents or agreements executed pursuant hereto.
3.2 This Amendment shall be signed by the Company and the Bank.
3.3 The Company shall have executed a Confirmation of Security Documents
and, if requested by the Bank (which request has not been made at this time),
shall provide the Bank with updated schedules and exhibits to the Security
Documents and shall take such other action as the Bank may reasonably consider
necessary or proper to establish, maintain, or continue a perfected and valid
security interest of the Bank in the Collateral.
3.4 The Company shall pay to the Bank a closing fee of $25,000.
3.5 Each of the Guarantors delivers to the Bank copies of resolutions
adopted by the Board of Directors of each of the Guarantors, certified by an
officer of the Guarantors, respectively, as being true and correct and in full
force and effect, without amendment as of the date hereof, authorizing the
Guarantors to enter into a Confirmation of Guaranty and any other documents or
agreements executed pursuant hereto.
3.6 Each of the Guarantors shall have executed a Confirmation of
Guaranty.
ARTICLE IV. Miscellaneous.
4.1 References in the Credit Agreement to "this Agreement" and
references in any note, certificate, instrument, or other document to the
"Credit Agreement" shall be deemed to refer to the Credit Agreement as
amended hereby and as further amended from time to time.
4.2 The Company agrees to pay and to save the Bank harmless for the
payment of all costs and expenses arising in connection with this Amendment,
including the reasonable fees of counsel to the Bank in connection with
preparing this Amendment and the related documents.
4.3 The Company acknowledges and agrees that the Bank has fully
performed all of its obligations under all documents executed in connection
with the Credit Agreement and all actions taken by the Bank are reasonable
and appropriate under the circumstances and within its rights under the
Credit Agreement and all other documents executed in connection therewith
and otherwise available.
Petroleum Development Corporation
Dated as of June 22, 1999
Page 4
The Company represents and warrants that it is not aware of any claims or causes
of action against the Bank, or any of its successors or assigns. Notwithstanding
this representation and as further consideration for the agreements and
understandings herein, the Company and its heirs, successors and assigns,
release the Bank and its successors and assigns from any liability, claim,
right or cause of action which now exists or hereafter arises, whether known
or unknown, arising from or in any way related to facts in existence as of
the date hereof to any agreements or transactions between the Bank and the
Company or to any acts or omissions of the Bank in connection therewith or
otherwise.
4.4 Except as expressly amended hereby, the Company agrees that the
Credit Agreement, the promissory note, and all other documents and agreements
executed by the Company in connection with the Credit Agreement in favor of the
Bank are ratified and confirmed and shall remain in full force and effect, and
that it has no set off, counterclaim, or defense with respect to any of the
foregoing. Terms used but not defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement.
4.5 This Amendment shall be governed by and construed in accordance with
the laws of the State of Michigan.
4.6 This Amendment may be signed in any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
If the foregoing is acceptable to you, as it is to us, please execute each
of the enclosed copies of this letter amendment and return them to us.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
Its: Vice President
Agreed and Accepted as of the
date set forth above:
PETROLEUM DEVELOPMENT CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
Its: Executive Vice President
DETROIT 7-2487 438227
