exhibit.htm


    


    SECOND
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     

    SECOND
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is
      entered into as of October 16, 2007, 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).

     

     

    WITNESSETH:

     

    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 amended, supplemented or otherwise modified from time
      to
      time, the “Credit Agreement”); and

     

    WHEREAS,
      the Borrower has requested that the Administrative Agent and the Lenders amend
      the Credit Agreement to, among other things, increase the Borrowing Base and
      the
      potential maximum amount of the Aggregate Revolving Commitment and modify
      certain covenants, 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 5 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:

     

    “Acquisition”
      means, the acquisition by the Borrower or any Restricted Subsidiary, whether
      by
      purchase, merger (and, in the case of a merger with any such Person, with such
      Person being the surviving corporation) or otherwise, of all or substantially
      all of the Equity Interest of, or the business, property or fixed assets of
      or
      business line or unit or a division of, any other Person primarily engaged
      in
      the business of producing oil or natural gas or the acquisition by the Borrower
      or any Restricted Subsidiary of property or assets consisting of Oil and Gas
      Interests.

     

    “Disposition”
      means, the disposition by the Borrower or any Restricted Subsidiary, whether
      by
      sale, merger, assignment, transfer or otherwise, of all or substantially all
      of
      the 

    
      
        
        

      

      
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    Equity
      Interest of any Restricted Subsidiary or any property or
      assets consisting of Oil and Gas Interests.

       

    

    “Maximum
      Facility Amount” means $400,000,000.

     

    “Second
      Amendment Effective Date” means October 16, 2007.

     

    “Senior
      Notes” is defined in Section 7.01(j).

     

    1.2  Amended
      Definitions.  Section 1.01 of the Credit Agreement
      shall be and it hereby is amended by amending and restating the following
      definitions to read in their entirety as follows:

     

    “Aggregate
      Revolving Commitment” means the amount equal to the lesser of (i) the
      Maximum Facility Amount and (ii) the Borrowing Base, as such Aggregate Revolving
      Commitment may be reduced or increased pursuant to Section 2.02 and Section
      2.03, provided that in no event shall the Aggregate Revolving Commitment
      exceed the Borrowing Base.  The Aggregate Revolving
      Commitment as of the Second Amendment Effective Date is
      $275,000,000.  If at any time the Borrowing Base is reduced below the
      Aggregate Revolving Commitment, the Aggregate Revolving Commitment shall be
      reduced automatically to the amount of the Borrowing Base in effect at such
      time.

     

    “Capital
      Markets Event” means the receipt by the Borrower of net proceeds of not less
      than $200,000,000 from the issuance of Indebtedness of the Borrower (including
      the issuance of Senior Notes) or Equity Interests of the Borrower on terms
      and
      conditions acceptable to Administrative Agent and Required Lenders and with
      the
      prior written consent of Administrative Agent and Required
      Lenders.

     

    “Consolidated
      EBITDAX” means, with respect to the Borrower and its Restricted Subsidiaries
      for any period, Consolidated Net Income for such period; plus without
      duplication and to the extent deducted in the calculation of Consolidated Net
      Income for such period, the sum of (a) income or franchise Taxes paid or
      accrued; (b) Consolidated Net Interest Expense; (c) amortization, depletion
      and
      depreciation expense; (d) any non-cash losses or charges on any Swap Agreement
      resulting from the requirements of FASB Statement 133 for that period; (e)
      oil
      and gas exploration expenses (including all drilling, completion, geological
      and
      geophysical costs) for such period; (f) losses from sales or other dispositions
      of assets (other than Hydrocarbons produced in the ordinary course of business)
      and other extraordinary or non-recurring losses, and (g) other non-cash charges
      (excluding accruals for cash expenses made in the ordinary course of business);
      minus, to the extent included in the calculation of Consolidated Net
      Income, (h) the sum of (i) any non-cash gains on any Swap Agreements resulting
      from the requirements of FASB Statement 133 for that period; (ii) extraordinary
      or non-recurring gains; and (iii) gains from sales or other dispositions of
      assets (other than Hydrocarbons produced in the ordinary course of business);
      provided that, with respect to the determination of Borrower’s compliance with
      the leverage ratio set forth in Section 7.11(b) for any period, Consolidated
      EBITDAX shall be adjusted to give effect, on a pro forma basis and consistent
      with GAAP, to any Acquisitions or Dispositions made during such period as if
      such Acquisition or Disposition, as the case may be, was made at the beginning
      of such period.

     

    
      
        
        

      

      
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    “Suspension
      Period” means the period beginning August 9, 2007, and ending on the earlier
      of (a) the occurrence of a Capital Markets Event or (b) October 1,
      2008.

     

    1.3  Termination
      and Reduction of the Aggregate Revolving
      Commitment.  Section 2.02(b) of the Credit
      Agreement shall be and it hereby is amended and restated in its entirety to
      read
      as follows:

     

    (b)  The
      Borrower may at any time terminate, or from time to time reduce, the Aggregate
      Revolving Commitment; provided that (i) each reduction of the Aggregate
      Revolving Commitment shall be in an amount that is an integral multiple of
      $1,000,000 and not less than $1,000,000 and shall be applied ratably to each
      Lender’s Revolving Commitment and (ii) the Borrower shall not terminate or
      reduce the Aggregate Revolving Commitment if, after giving effect to any
      concurrent prepayment of the Loans in accordance with Section 2.10 and
      Section 2.11, the Aggregate Revolving Credit Exposure would exceed the Aggregate
      Revolving Commitment.

     

    1.4  Increases
      in the Aggregate Revolving Commitment.  The first sentence of
Section 2.03 of the Credit Agreement shall be and it hereby is
      amended and restated in its entirety to read as follows:

     

    Section 2.03   Increases
      in the Aggregate Revolving Commitment.  So long as no Default has
      occurred and is continuing or would be caused by such increase, the Borrower
      may
      by written notice to the Administrative Agent, on or before ten Business Days
      after any Redetermination of the Borrowing Base pursuant to Article III, elect
      to increase the existing Aggregate Revolving Commitment in a minimum amount
      of
      $5,000,000 and integral multiples of $1,000,000 in excess of that amount (any
      such increase, the “New Commitments”); provided that the amount of
      such increase together with the existing Aggregate Revolving Commitment does
      not, in the aggregate, exceed the lesser of (a) the Maximum Facility Amount
      and
      (b) the Borrowing Base then in effect as a result of such
      Redetermination.

     

    1.5  Letters
      of Credit/Expiration Date.  Section 2.06(c) of
      the Credit Agreement shall be and it hereby is amended and restated in its
      entirety to read as follows:

     

    (c)  Expiration
      Date.  Each Letter of Credit shall expire at or prior to the close
      of business on the earlier of (i) the date one year after the date of the
      issuance of such Letter of Credit (or, in the case of any renewal or extension
      thereof, one year after such renewal or extension) and (ii) the date that
      is five Business Days prior to the Maturity Date.

    
       

      1.6  Repayment of
        Loans; Evidence of Debt.  Section 2.09(e) of the
        Credit Agreement shall be and it hereby is amended and restated in its entirety
        to read as follows:

       

      (e)  Any
        Lender or Participant may request that Loans made by it be evidenced by a
        promissory note.  In such event, the Borrower shall prepare, execute
        and deliver to such Lender or Participant a promissory note payable to the
        order
        of such Lender or Participant (or, if requested by such Lender or Participant,
        to such Lender or Participant and its registered assigns) and in the form
        attached hereto as Exhibit E.  Thereafter, the Loans evidenced by such
        promissory note and interest thereon shall at all times (including after
        assignment pursuant to 

    

    
      
        
        

      

      
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 Section 11.04)
        be represented by one or more promissory notes in such form payable to the
        order
        of the payee named therein (or, if such promissory note is a registered note,
        to
        such payee and its registered assigns).

    

     

    1.7  Reserve
      Report; Proposed Borrowing Base.  Section 3.01 of
      the Credit Agreement shall be and it hereby is amended and restated in its
      entirety to read as follows:

     

    Section 3.01.  Reserve
      Report; Proposed Borrowing Base.  During the period from the
      Effective Date until the first Redetermination after the Effective Date, the
      Borrowing Base shall be $125,000,000 (the “Initial Borrowing Base”).
      During the period from the Second Amendment Effective Date until the first
      Redetermination after the Second Amendment Effective Date, the Borrowing Base
      shall be $275,000,000.  As soon as available and in any event by
      April 1 and October 1 of each year, beginning April 1, 2008, the Borrower
      shall deliver to the Administrative Agent and each Lender a Reserve Report,
      prepared as of the immediately preceding December 31 and June 30, respectively,
      in form and substance reasonably satisfactory to the Administrative Agent and
      prepared by an Approved Petroleum Engineer (or, in the case of the Reserve
      Report due on October 1 of each year, by petroleum engineers employed by the
      Borrower), said Reserve Report to utilize economic and pricing parameters
      established from time to time by the Administrative Agent, together with such
      other information, reports and data concerning the value of the Borrowing Base
      Properties as the Administrative Agent shall deem reasonably necessary to
      determine the value of such Borrowing Base Properties.  Simultaneously
      with the delivery to the Administrative Agent and the Lenders of each Reserve
      Report, the Borrower shall submit to the Administrative Agent and each Lender
      the Borrower’s requested amount of the Borrowing Base as of the next
      Redetermination Date.  Promptly after the receipt by the
      Administrative Agent of such Reserve Report and the Borrower’s requested amount
      for the Borrowing Base, the Administrative Agent shall submit to the Lenders
      a
      recommended amount of the Borrowing Base to become effective for the period
      commencing on the next Redetermination Date.

     

    1.8  Scheduled
      Redeterminations of the Borrowing Base; Procedures and
      Standards.  The first two sentences of
Section 3.02 of the Credit Agreement shall be and they hereby are
      amended and restated in their entirety to read as follows:

     

         Section 3.02.  Scheduled
      Redeterminations of the Borrowing Base; Procedures and
      Standards.  Based in part on the Reserve Reports made available to
      the Administrative Agent and the Lenders pursuant to Section 3.01, the Lenders
      shall redetermine the Borrowing Base on or prior to the next Redetermination
      Date (or such date promptly thereafter as reasonably possible based on the
      engineering and other information available to the Lenders).  Any
      Borrowing Base which becomes effective as a result of any Redetermination of
      the
      Borrowing Base shall be subject to the following restrictions: (a) such
      Borrowing Base shall not exceed the amount of the Borrowing Base requested
      by
      the Borrower, (b) such Borrowing Base shall not exceed the Maximum Facility
      Amount, (c) to the extent such Borrowing Base represents an increase in the
      Borrowing Base in effect prior to such Redetermination, such Borrowing Base
      must
      be approved by all Lenders, and (d) to the extent such Borrowing Base represents
      a decrease in the Borrowing Base in effect prior to such Redetermination or
      a
      reaffirmation of 

    
      
        
        

      

      
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such
        prior Borrowing Base, such Borrowing Base must be approved by the Administrative
        Agent and Required Lenders.

    

     

    1.9  Borrowing
      Base.  Article III of the Credit Agreement shall be
      and it hereby is amended by inserting the following at the end of such Article
      as Section 3.07:

     

    Section 3.07.  Additional
      Reductions in Borrowing Base.  Upon the issuance of any Senior
      Notes, the Borrowing Base then in effect shall automatically be reduced by
      $300
      for each $1,000 in stated principal amount of such Senior Notes issued by the
      Borrower.

     

    1.10  Financial
      Statements; Other Information.  Section 6.01(a)
      of the Credit Agreement shall be and it hereby is amended and restated in its
      entirety to read as follows:

     

    (a)  within
      90 days after the end of each fiscal year of the Borrower, the audited
      consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows of the Borrower and its Consolidated Subsidiaries as
      of
      the end of and for such year, setting forth in each case in comparative form
      the
      figures for the previous fiscal year, all reported on by PricewaterhouseCoopers
      L.L.P. or other independent public accountants reasonably acceptable to
      Administrative Agent (without a “going concern” or like qualification or
      exception and without any qualification or exception as to the scope of such
      audit) to the effect that such consolidated financial statements present fairly
      in all material respects the financial condition and results of operations
      of
      the Borrower and its Consolidated Subsidiaries on a consolidated basis in
      accordance with GAAP consistently applied;

     

    1.11  Financial
      Statements; Other Information.  Section 6.01(b)
      of the Credit Agreement shall be and it hereby is amended and restated in its
      entirety to read as follows:

     

    (b)  within
      45 days after the end of each fiscal quarter of the Borrower, the consolidated
      balance sheet and related statements of operations, stockholders’ equity and
      cash flows of the Borrower and its Consolidated Subsidiaries as of the end
      of
      and for such fiscal quarter and the then elapsed portion of the fiscal year,
      setting forth in each case in comparative form the figures for the corresponding
      period or periods of (or, in the case of the balance sheet, as of the end of)
      the previous fiscal year, all certified by one of its Financial Officers as
      presenting fairly in all material respects the financial condition and results
      of operations of the Borrower and its Consolidated Subsidiaries on a
      consolidated basis in accordance with GAAP consistently applied, subject to
      normal year-end audit adjustments and the absence of
      footnotes;

     

    
      1.12  Financial
        Statements; Other Information.  Section 6.01(d)
        of the Credit Agreement shall be and it hereby is amended and restated in
        its
        entirety to read as follows:

       

      (d) 
        Reserved.

       

      1.13  Financial
        Statements; Other Information.  Section 6.01(f)
        of the Credit Agreement shall be and it hereby is amended and restated in
        its
        entirety to read as follows:

       

      (f) 
         for any Sponsored Partnership, upon the written request (or the verbal
        request confirmed in writing within ten days of such verbal request) of the
        Administrative Agent, (A) 

    

     

    
      
        
        

      

      
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 copies
        of any tax returns which such Sponsored Partnership has sent to or filed
        with
        the Internal Revenue Service, and (B) the audited consolidated balance sheet
        and
        related statements of operations, partners’ equity and cash flows of such
        Sponsored Partnership as of the end of any fiscal year, setting forth in
        each
        case in comparative form the figures for the previous fiscal year, as reported
        on by PricewaterhouseCoopers L.L.P. or other independent public accountants
        reasonably acceptable to the Administrative Agent (without a “going concern” or
        like qualification or exception and without any qualification or exception
        as to
        the scope of such audit) to the effect that such consolidated financial
        statements present fairly in all material respects the financial condition
        and
        results of operations of such Sponsored Partnership on a consolidated basis
        in
        accordance with GAAP consistently applied;

    

     

    1.14  Security.  The
      first sentence of Section 6.09 of the Credit Agreement shall be and it
      hereby is amended and restated in its entirety to read as follows:

     

    Section
      6.09.  Security.  The Borrower will, and will cause
      each Restricted Subsidiary to, execute and deliver to the Administrative Agent,
      for the benefit of the Secured Parties, (a) Mortgages in form and substance
      acceptable to the Administrative Agent together with such other assignments,
      conveyances, amendments, agreements and other writings, including, without
      limitation, UCC-1 financing statements (each duly authorized and executed,
      as
      applicable) as the Administrative Agent shall deem necessary or appropriate
      to
      grant, evidence and perfect Liens in Direct Interests having an Engineered
      Value
      equal to or greater than (i) at any time prior to the earlier of the occurrence
      of a Capital Markets Event or December 31, 2007, the Minimum Mortgaged Value
      and
      (ii) at all other times, eighty percent (80%) of the Engineered Value of the
      Direct Interests included in the Borrowing Base Properties and (b) Security
      Agreements in form and substance acceptable to the Administrative Agent together
      with such other assignments, conveyances, amendments, agreements and other
      writings, including, without limitation, UCC-1 financing statements (each duly
      authorized and executed, as applicable) and control agreements as the
      Administrative Agent shall deem necessary or appropriate to grant, evidence
      and
      perfect Liens in the Partnership Interests and certain other personal property
      of the Borrower or such Restricted Subsidiary, as the case may be, subject
      only
      to Permitted Encumbrances and other Liens permitted under Section
      7.02.

    
       

      1.15  Indebtedness.  Section 7.01
        of the Credit Agreement shall be and it hereby is amended by (a) inserting
        the
        following as Section 7.01(i) and (b) relettering the existing
        clauses (i) and (j) of Section 7.01 as clauses (j) and (k)
        respectively:

       

      (i)  Unsecured
        Indebtedness of the Borrower evidenced by unsecured senior notes or unsecured
        senior subordinated notes containing terms and conditions (including, if
        applicable, subordination provisions) acceptable to the Administrative Agent
        and
        the Required Lenders in their sole discretion and in an aggregate principal
        amount not to exceed $250,000,000 (“Senior
        Notes”);

    

    
      
        
        

      

      
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      1.16  Other
        Agents.Article X of the Credit Agreement shall be and it hereby
        is amended by adding the following at the end of the third paragraph of that
        Article:

    

     

    No
      Person identified as a Syndication Agent on Schedule 2.01 or as a Joint Lead
      Arranger, in each case in its respective capacity as such, shall have any
      responsibilities or duties, or incur any liability, under this Agreement or
      the
      other Loan Documents.

     

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

     

    (b)  Neither
      this Agreement nor any provision hereof may be waived, amended or modified
      except pursuant to an agreement or agreements in writing entered into by the
      Credit Parties and the Required Lenders or by the Credit Parties and the
      Administrative Agent with the consent of the Required Lenders; provided
      that no such agreement shall (1) increase the Borrowing Base without the written
      consent of each Lender, (2) increase the Applicable Percentage of any Lender
      or
      the Aggregate Revolving Commitment above the Maximum Facility Amount without
      the
      written consent of such Lender, (3) reduce the principal amount of any Loan
      or
      LC Disbursement or reduce the rate of interest thereon, or reduce any fees
      payable hereunder, without the written consent of each Lender affected thereby,
      (4) postpone the scheduled date of payment of the principal amount of any Loan
      or LC Disbursement, or any interest thereon, or any fees payable hereunder,
      or
      reduce the amount of, waive or excuse any such payment, or postpone the
      scheduled date of expiration of any of the Aggregate Revolving Commitment,
      without the written consent of each Lender affected thereby, (5) change
      Section 2.18(b) or Section 2.18(c) in a manner that would alter the
      pro rata sharing of payments required thereby, without the written consent
      of
      each Lender, (6) release any Credit Party from its obligations under the Loan
      Documents or, except in connection with any sales, transfers, leases or other
      dispositions permitted in Section 7.03, release any of the Collateral
      without the written consent of each Lender, or (7) change any of the provisions
      of this Section or the definition of “Required Lenders” or any other provision
      hereof specifying the number or percentage of Lenders required to waive, amend
      or modify any rights hereunder or make any determination or grant any consent
      hereunder, without the written consent of each Lender;
providedfurther that no such agreement shall amend, modify or
      otherwise affect the rights or duties of the Administrative Agent or the Issuing
      Bank hereunder without the prior written consent of the Administrative Agent
      or
      the Issuing Bank, as the case may be.

    
       

      1.18  Amendment
        to Schedules.  Schedule 2.01, Schedule 4.06 and
Schedule 4.13 of the Credit Agreement shall be and they
        hereby are
        amended in their entirety by substituting Schedule 2.01, Schedule
        4.06 and Schedule 4.13 attached hereto.

       

      SECTION
        2.  New
        Lenders and Reallocation of Revolving Commitments and
        Loans.  The Lenders have agreed among themselves to
        reallocate their respective Applicable Percentages of the Aggregate Revolving
        Commitment 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 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 

    

    
      
        
        

      

      
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Lender’s
        acquisition of an interest in the Aggregate Revolving Commitment.  On
        the Second Amendment Effective Date and after giving effect to such reallocation
        of the Aggregate Revolving Commitment, the Applicable Percentage 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
        its Revolving Commitment allocated to it from each of the other Lenders 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
        allocation.  The Borrower and Administrative Agent hereby consent to
        such assignment to the New Lenders.

    

     

    SECTION
      3.  Conditions.  The
      amendments to the Credit Agreement contained in Section 1 of this
      Amendment and the assignment contained in Section 2 of this Amendment
      shall be effective upon the satisfaction of each of the conditions set forth
      in
      this Section 3.

     

    3.1  Execution
      and Delivery.  Each Credit Party, each Lender, including the
      New 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 effectiveness of this Amendment.

     

    3.3  Fees.  The
      Administrative Agent, the Joint Lead Arrangers and the Sole Bookrunner shall
      have received all fees payable in the amounts and at the times separately agreed
      upon among the Administrative Agent, the Joint Lead Arrangers, the Sole
      Bookrunner and the Borrower.

     

    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  Unioil
      Guaranty.  The Borrower shall have, and shall have caused
      Unioil to, comply with Sections 6.13 and 6.14 of the Credit
      Agreement with respect to Unioil, including, without limitation, the execution
      and delivery of a Counterpart Agreement in the form of Exhibit C to
      the Credit Agreement.

    
       

      3.6  Authorization
        and Good Standing.  The Administrative Agent shall have
        received such documents and certificates as the Administrative Agent or its
        counsel may reasonably request relating to the organization, existence and
        good
        standing of each Credit Party, the authorization of this Amendment and any
        other
        legal matters relating to the Credit Parties or this Amendment, all in form
        and
        substance satisfactory to the Administrative Agent and its counsel.

       

      3.7  Other
        Documents.  The Administrative Agent shall have received such
        other instruments and documents incidental and appropriate to the transaction
        provided for herein as

    

    
      
        
        

      

      
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 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 Borrower.  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 and assignments 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 Second
      Amendment Effective Date (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.

     

    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.  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


    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        
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.  However, this
        Amendment shall bind no party until each Credit Party, the Lenders (or at
        least
        the required percentage thereof), and the Administrative Agent have executed
        a
        counterpart.  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 BETWEEN 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.

     

    [Remainder
      of Page Intentionally Blank.  Signature Pages
      Follow.]

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    



    IN
      WITNESS WHEREOF, the parties have caused this Second Amendment to
      Amended and Restated Credit Agreement to be duly executed as of the date first
      above written.

    


      
        	
                BORROWER:

                 

              
	
                PETROLEUM
                  DEVELOPMENT CORPORATION

              
	 
	
                By:

              	
                /s/
                  Richard W. McCullough

              
	
                Name:

              	
                Richard
                  W. McCullough

              
	
                Title:

              	
                Chief
                  Financial Officer

              
	 	 
	
                GUARANTORS:

              
	 
	
                RILEY
                  NATURAL GAS COMPANY

              
	 
	
                By:

              	
                 /s/
                  Thomas E. Riley

              
	
                Name:

              	
                Thomas
                  E. Riley

              
	
                Title:

              	
                President

              
	 	 
	
                UNIOIL

              	 
	 	 
	
                By:

              	
                 /s/
                  Thomas E. Riley

              
	
                Name:

              	
                Thomas
                  E. Riley

              
	
                Title:

              	
                President

              


      




     

     

    



    
      
              

                     
      

                  Signature
            Page      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


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

              
	 
	
                By:

              	
                /s/ Jo
                  Linda Papadakis

              
	
                Name:

              	
                Jo
                  Linda Papadakis

              
	
                Title:

              	
                Vice
                  President

              


      




     

    
 

    
      
              

                    
      

                  Signature
            Page      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

     

     

    


      
        	
                BNP
                  PARIBAS,

              
	
                as
                  a Lender and as Syndication Agent

              
	 	 
	
                By:

              	
                /s/
                  Douglas R. Liftman

              
	
                Name:

              	
                Douglas
                  R. Liftman

              
	
                Title:

              	 Managing
                Director
	 	 
	 	 
	
                By:

              	
                /s/
                  Betsy Jocher    

              
	
                Name:

              	 Betsy
                Jocher
	
                Title:

              	 Director


      




     

     


    
      
              

                  
      

                  Signature
            Page      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    
      	
              WACHOVIA
                BANK, N.A., as a Lender

            
	 
	 	 
	
              By:

            	
              /s/
                Jay Buckman

            
	 	
              Jay
                Buckman, Vice
                President

            


    





    
      
              

                  
      

                  Signature
            Page      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    
      	
              GUARANTY
                BANK, FSB, as a Lender

            
	 	 
	
              By:

            	 /s/
              Kelly L. Elmore III
	
              Name:

            	 Kelly
              L. Elmore III
	
              Title:

            	 Senior
              Vice President


    





     




     

    



    
      
              

                  
      

                  Signature
            Page      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


      
        	
                BANK
                  OF OKLAHOMA, as a Lender

              
	 
	 	 
	
                By:

              	/s/  Lindsay
                Sherrer    
	
                Name:

              	 Lindsay
                Sherrer 
	
                Title:

              	 Vice
                President


      

      






     

     

    



    
      
              

                  
      

                  Signature
            Page      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    
      	
              MORGAN
                STANLEY BANK, as a Lender

            
	 
	
              By:

            	 /s/
              Daniel Twenge
	
              Name:

            	 Daniel
              Twenge
	
              Title:

            	 Authorized
              Signatory


    




    


       





     

    



    
      
              

                  
      

                  Signature
            Page