Eighth Amendment to Amended and Restated Credit Agreement entered into as of December 18, 2009, by and among Petroleum Development Corporation, certain of its subsidiaries, JPMorgan Chase Bank, N.A. and various other banks

 

EIGHTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered into as of December 18, 2009, by and among PETROLEUM DEVELOPMENT CORPORATION (the “Borrower”), CERTAIN SUBSIDIARIES OF THE BORROWER, as Guarantors (the “Guarantors”), the LENDERS party hereto (the “Lenders”) and JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative Agent”).  Unless the context otherwise requires or unless otherwise expressly defined herein, capitalized terms used but not defined in this Amendment have the meanings assigned to such terms in the Credit Agreement (as defined below).

 

 

 

WHEREAS, the Borrower, the Guarantors, the Administrative Agent and the Lenders have entered into that certain Amended and Restated Credit Agreement dated as of November 4, 2005 (as the same has been and may hereafter be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”); and

 

WHEREAS, the Borrower and the Guarantors have requested that the Administrative Agent and the Lenders amend the Credit Agreement in certain respects and the Administrative Agent and the Lenders have agreed to do so on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the Borrower, the Guarantors, the Administrative Agent and the Lenders hereby agree as follows:

 

SECTION 1. Amendments to Credit Agreement.  Subject to the satisfaction or waiver in writing of each condition precedent set forth in Section 3 of this Amendment, and in reliance on the representations, warranties, covenants and agreements contained in this Amendment, the Credit Agreement shall be amended in the manner provided in this Section 1.

 

1.1 Additional Definitions.  Section 1.01 of the Credit Agreement shall be and it hereby is amended by inserting the following definitions in appropriate alphabetical order:

 

“Eighth Amendment Effective Date” means December 18, 2009.

 

“Excluded Hedges” means, collectively, Swap Agreements that (i) are basis differential only swaps for volumes of Natural Gas included under other Swap Agreements permitted by Section 7.05(a), (ii) are a hedge of volumes of Crude Oil or Natural Gas by means of a price “floor” for which there exists no deferred obligation to pay the related premium or other purchase price or the only deferred obligation is to either pay the premium or other purchase price on each settlement date so long as such settlement date occurs at least monthly, or pay the financing for such premium or other purchase price, or (iii) for purposes of determining compliance with clause (y) of Section 7.05(a) only, are volumes of Crude Oil and Natural Gas included in Allocated Partnership Volumes.

 

 

 

1.2 Amended Definitions.  The following definition in Section 1.01 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

 

“Net Cash Proceeds” means, (i) with respect to the sale of Borrowing Base Properties (including Attributed Interests and Equity Interests of any Restricted Subsidiary) by the Borrower or any Restricted Subsidiary (or Sponsored Partnership with respect to Attributed Interests), the excess, if any, of (a) the sum of cash and cash equivalents received in connection with such sale, but only as and when so received, over (b) the sum of (1) the principal amount of any Indebtedness that is secured by such asset and that is required to be repaid in connection with the sale thereof (other than the Loans), and (2) the out-of-pocket expenses incurred by the Borrower or such Restricted Subsidiary (or Sponsored Partnership with respect to Attributed Interests) in connection with such sale and (ii) with respect to any issuance of Senior Notes, the cash proceeds from such issuance of Senior Notes net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses.

 

1.3 Mandatory Prepayment of Loans.  Clause (b) of Section 2.11 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

 

(b)           If the Borrower or any Restricted Subsidiary (or any Sponsored Partnership with respect to Attributed Interests) sells, exchanges, transfers or otherwise disposes of any Borrowing Base Properties (whether pursuant to a sale, exchange, transfer or other disposition of Equity Interests of a Restricted Subsidiary permitted pursuant to Section 7.03(a) or otherwise) at any time a Borrowing Base Deficiency exists or if after giving effect to such sale, exchange, transfer or disposition a Borrowing Base Deficiency would exist, the Borrower shall prepay the Borrowings with the Net Cash Proceeds received from such sale, exchange, transfer or other disposition on the date it or any Restricted Subsidiary (or any Sponsored Partnership with respect to Attributed Interests) receives such Net Cash Proceeds to the extent necessary to eliminate such Borrowing Base Deficiency after giving effect to such sale, exchange, transfer or other disposition, or, in the case of any exchange of Borrowing Base Properties for other Oil and Gas Interests, take all actions reasonably necessary to cause such Oil and Gas Interests received in such exchange to become additional security for the Obligations by instruments satisfactory in form and substance to the Required Lenders; provided, however that amounts applied to the payment of Borrowings pursuant to this Section may be reborrowed subject to and in accordance with the terms of this Agreement.

 

1.4 Fundamental Changes.  Clause (a) of Section 7.03 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

 

 

1.5 Swap Agreements.  Clause (a) of Section 7.05 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

 

(a)           hedge or mitigate Crude Oil and Natural Gas price risks to which the Borrower, any Restricted Subsidiary or any Sponsored Partnership has actual exposure (whether or not treated as a hedge for accounting purposes under GAAP); provided that at the time the Borrower (whether on its own behalf or on behalf of any Sponsored Partnership), any Restricted Subsidiary or any Sponsored Partnership enters into any such Swap Agreement, such Swap Agreement (i) in the case of any Swap Agreement entered into on or after the Eighth Amendment Effective Date, does not have a term greater than forty-eight (48) months from the date such Swap Agreement is entered into, and (ii) when aggregated with all other Swap Agreements then in effect would not cause the aggregate notional volume per month for each of Crude Oil and Natural Gas, calculated separately, under all Swap Agreements then in effect (other than Excluded Hedges) to exceed, as of the date such Swap Agreement is executed, either (x) eighty percent (80%) of the “forecasted production from proved producing reserves” (as defined below) of the Borrower, the Restricted Subsidiaries, and the Sponsored Partnerships, taken as a whole, or (y) eighty percent (80%) of the “forecasted production from proved producing reserves” of the Borrower and the Restricted Subsidiaries (including the Attributed Interests), in each case, for any month during the forthcoming forty-eight (48) month period; and

 

1.6 Notices.  Subclause (ii) of Section 11.01(a) of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

 

(ii)           if to the Administrative Agent or Issuing Bank, to JPMorgan Chase Bank, N.A., Mail Code IL1-0010, 10 South Dearborn, Floor 07, Chicago, Illinois, 60603-2003, Telecopy No.: (312) 385-7096, Attention: Claudia A. Kech, with a copy to JPMorgan Chase Bank, N.A., Mail Code TX2-S038, 712 Main Street, 8th Floor, Houston, Texas 77002, Telecopy No. (713) 216-7770, Attention:  Jo Linda Papadakis;

 

1.7 Waivers; Amendments.  Subclause (7) of Section 11.02(b) of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

 

 

1.8 Amendment to Schedules.  Schedule 2.01 of the Credit Agreement shall be and it hereby is amended and restated in its entirety and replaced with Schedule 2.01 attached hereto.

 

SECTION 2. New Lenders and Reallocation of Revolving Commitments and Loans.  The Lenders have agreed among themselves to reallocate their respective Revolving Commitments and to, among other things, allow certain financial institutions identified by J.P. Morgan Securities, Inc., in its capacity as a Joint Lead Arranger (in such capacity “J.P. Morgan”), in consultation with the Borrower, to become a party to the Credit Agreement as a Lender (each, a “New Lender”) by acquiring an interest in the Aggregate Revolving Commitment, and Administrative Agent and the Borrower hereby consent to such reallocation and each New Lender’s acquisition of an interest in the Aggregate Revolving Commitment.  On the date this Amendment becomes effective and after giving effect to such reallocation of the Aggregate Revolving Commitment, the Revolving Commitment of each Lender shall be as set forth on Schedule 2.01 of this Amendment.  With respect to such reallocation, each New Lender shall be deemed to have acquired the Revolving Commitment allocated to it from each of the other Lenders and such acquisition and the reallocation of the Aggregate Revolving Commitment among the Lenders shall be deemed to have been consummated pursuant to the terms of the Assignment and Assumption attached as Exhibit A to the Credit Agreement as if such New Lender and the other Lenders had executed an Assignment and Assumption with respect to such reallocation.  The Borrower and Administrative Agent hereby consent to such assignment to the New Lenders.  The Administrative Agent hereby waives the $3,500 processing and recordation fee set forth in Section 11.04(b)(ii)(C) of the Credit Agreement with respect to the assignments and reallocations contemplated by this Section 2.  To the extent requested by any Lender, and in accordance with Section 2.16 of the Credit Agreement, the Borrower shall pay to such Lender, within the time period prescribed by Section 2.16 of the Credit Agreement, any amounts required to be paid by the Borrower under Section 2.16 of the Credit Agreement in the event the payment of any principal of any Eurodollar Loan or the conversion of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto is required in connection with the reallocation contemplated by this Section 2.

 

SECTION 3. Conditions.  The amendments to the Credit Agreement contained in Section 1 of this Amendment shall each be effective upon the satisfaction of each of the conditions set

 

 

forth in this Section 3.

 

3.1 Execution and Delivery.  Each Credit Party, the Lenders, and the Administrative Agent shall have executed and delivered this Amendment and each other required document, all in form and substance satisfactory to the Administrative Agent.

 

3.2 No Default.  No Default shall have occurred and be continuing or shall result from the effectiveness of this Amendment.

 

3.3 Fees.  The Borrower, the Administrative Agent and J.P. Morgan shall have executed and delivered a fee letter in connection with this Amendment, and the Administrative Agent and J.P. Morgan shall have received the fees separately agreed upon in such fee letter.

 

3.4 Governmental Approvals.  All governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the financing contemplated by the Credit Agreement, as amended to date, and by this Amendment and the continuing operations of the Borrower and its Subsidiaries shall have been obtained and be in full force and effect.

 

3.5 Notes.  Borrower shall have executed and delivered a promissory note to each New Lender that has requested a promissory note in accordance with Section 2.09(e) of the Credit Agreement.

 

3.6 Other Documents.  The Administrative Agent shall have received such other instruments and documents incidental and appropriate to the transaction provided for herein as the Administrative Agent or its special counsel may reasonably request, and all such documents shall be in form and substance satisfactory to the Administrative Agent.

 

SECTION 4. Representations and Warranties of Credit Parties.  To induce the Lenders to enter into this Amendment, each Credit Party hereby represents and warrants to the Lenders as follows:

 

4.1 Reaffirmation of Representations and Warranties/Further Assurances.  After giving effect to the amendments contained herein, each representation and warranty of such Credit Party contained in the Credit Agreement or in any other Loan Document is true and correct in all material respects on the date hereof (except to the extent such representations and warranties relate solely to an earlier date, in which case they are true and correct as of such earlier date).

 

4.2 Corporate Authority; No Conflicts.  The execution, delivery and performance by such Credit Party of this Amendment and all documents, instruments and agreements contemplated herein are within such Credit Party’s corporate or other organizational powers, have been duly authorized by necessary action, require no action by or in respect of, or filing with, any court or agency of government and do not violate or constitute a default under any provision of any applicable law or other agreements binding upon such Credit Party or result in the creation or imposition of any Lien upon any of the assets of such Credit Party.

 

 

 

4.3 Enforceability.  This Amendment constitutes the valid and binding obligation of such Credit Party enforceable in accordance with its terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditor’s rights generally, and (ii) the availability of equitable remedies may be limited by equitable principles of general application.

 

4.4 No Default.  As of the date hereof, both before and immediately after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

 

4.5 Swap Agreements.  As of the date hereof, no Credit Party is a party to any Swap Agreement which has a term beyond December 31, 2013.

 

SECTION 5. Miscellaneous.

 

5.1 Reaffirmation of Loan Documents and Liens.  Any and all of the terms and provisions of the Credit Agreement and the Loan Documents shall, except as amended and modified hereby, remain in full force and effect and are hereby in all respects ratified and confirmed by each Credit Party.  Each Credit Party hereby agrees that the amendments and modifications herein contained shall in no manner affect or impair the liabilities, duties and obligations of any Credit Party under the Credit Agreement and the other Loan Documents or the Liens securing the payment and performance thereof.

 

5.2 Parties in Interest.  All of the terms and provisions of this Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.

 

5.3 Legal Expenses.  Each Credit Party hereby agrees to pay all reasonable fees and expenses of counsel to the Administrative Agent incurred by the Administrative Agent in connection with the preparation, negotiation and execution of this Amendment and all related documents.

 

5.4 Counterparts.  This Amendment may be executed in one or more counterparts and by different parties hereto in separate counterparts each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.  Delivery of photocopies of the signature pages to this Amendment by facsimile or electronic mail shall be effective as delivery of manually executed counterparts of this Amendment.

 

5.5 Complete Agreement.  THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

5.6 Headings.  The headings, captions and arrangements used in this Amendment are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify or modify the terms of this Amendment, nor affect the meaning thereof.

 

 

5.7 Governing Law.  This Amendment shall be construed in accordance with and governed by the law of the State of Illinois.

 

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the date first above written.

 

PETROLEUM DEVELOPMENT CORPORATION

 

 

By:    /s/ Darwin L. Stump     

Name: Darwin L. Stump

Title:   Vice President Accounting Operations

 

 

RILEY NATURAL GAS COMPANY

 

By:  /s/ Darwin L. Stump      

Name: Darwin L. Stump

Title:   Treasurer

 

 

UNIOIL

 

By: /s/ Darwin L. Stump   

Name: Darwin L. Stump

Title:   President

JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, N.A. (Illinois)), as Administrative Agent and as a Lender

 

By:      /s/ JoLinda Papadakis   

Name:  JoLinda Papadakis

Title:    Vice President

 

as a Lender and as Syndication Agent

By:     /s/ Doug Liftman  

Name:  Doug Liftman

Title:    Managing Director

By:    /s/ Betsy Jocher   

Name:  Betsy Jocher

Title:    Director

 

BANK OF AMERICA, N.A., as a Lender

and as a Co-Documentation Agent

By:       /s/ Christen A. Lacey

Name:  Christen Lacey

Title:    Principal

 

as a Lender and as a Co-Documentation Agent

 

 

By:   /s/ Mark A. Roche   

Name:  Mark A. Roche

                   Title:  Managing Director

 

By:  /s/ Sharada Manne  

Name: Sharada Manne

Title:   Director

 

BANK OF MONTREAL, as a Lender

and as a Co-Documentation Agent

 

 

By:       /s/ Gumaro Tijerina      

Name:  Gumaro Tijerina

Title:    Director

 

WACHOVIA BANK, N.A., as a Lender

By:        /s/ Oleg Kogan    

Name:   Oleg Kogan

Title:     Vice President

 

COMPASS BANK (as successor in interest to GUARANTY BANK, FSB), as a Lender

By:        /s/ Kathleen Bowen

Name:   Kathleen J. Bowen

Title:     Senior Vice President

 

THE ROYAL BANK OF SCOTLAND plc, as a Lender

By:      /s/ Matthew Main  

Name:  Matthew Main 

Title:    Managing Director

 

BANK OF OKLAHOMA, as a Lender

By:        /s/ Wes Webb 

Name:   Wes Webb

Title:       Senior Vice President

 

as a Lender

 

 

By:      /s/ Kathleen J. Bowen 

Name:  Kathleen J. Bowen

Title:    Senior Vice President

 

as a Lender

 

 

By:       /s/ James Forward  

Name:  James Forward

Title:    Managing Director

 

as a Lender

 

 

By:       /s/ W. David McCarver IV

Name:  W. David McCarver IV

Title:     Vice President

 

as a Lender

 

 

By:      /s/ Bruce E. Hernandez 

Name:   Bruce E. Hernandez

Title:     Vice President

SCHEDULE 2.01

Applicable Percentages and Revolving Commitments