Document:

Exhibit 10.1 - Description of Cash Bonus Plan of Berry Petroleum Company

     

    
      

      

    

    Exhibit
      10.1

    
      DESCRIPTION
        OF THE SHORT-TERM CASH INVENTIVE PLAN (BONUS)

      

      Annual
        cash incentive awards, which are designed to provide short-term performance
        incentives, are made to employees to recognize and reward corporate and
        individual performance. The plan in effect provides an annual incentive fund
        of
        up to 3.5% of the Company's annual net income, with certain adjustments,
        to
        potentially any and all employees upon achievement of the Company’s growth and
        profitability goals.

      

      Annually,
        Management and the Board will set specific targets to be achieved which will
        determine the cash payment as a whole and then to each eligible employee
        based
        on a formula. There shall be specific targets established for each of the
        following: net income, production, operating expenditures, reserve additions,
        and finding and development costs. The Board retains the flexibility to adjust
        various items to assure compliance with the intent of the cash incentive
        awards.
        All annual cash bonuses for executives are approved by the Compensation
        Committee and the Board of Directors. 

    

     

     

    1Exhibit 10.6 - First Amendment to Credit Agreement dated as of December 15,
      2005 by and among Registrant and Wells Fargo Bank, N.A. and other financial
      institutions

    
      

      

    

    Exhibit
      10.6

    [EXECUTION]
      

     

    FIRST
      AMENDMENT TO CREDIT AGREEMENT 

     

    THIS
      FIRST AMENDMENT TO CREDIT AGREEMENT (herein called the “Amendment”) made as of
      December 15, 2005 by and among BERRY PETROLEUM COMPANY, a Delaware corporation
      (“Borrower”), WELLS FARGO BANK, NATIONAL ASSOCIATION, individually and as
      Administrative Agent (“Agent”), and the Lenders party to the Original Agreement
      defined below (“Lenders”). 

     

    W
      I T N E
      S S E T H: 

     

    WHEREAS,
      Borrower, Agent and Lenders entered into that certain Credit Agreement dated
      as
      of June 27, 2005 (the “Original Agreement”), for the purpose and consideration
      therein expressed, whereby Lenders became obligated to make loans to Borrower
      as
      therein provided; and 

     

    WHEREAS,
      Borrower, Agent and Lenders desire to amend the Original Agreement as set forth
      herein; 

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      agreements contained herein and in the Original Agreement, in consideration
      of
      the loans which may hereafter be made by Lenders to Borrower, and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto do hereby agree as follows: 

     

    ARTICLE
      I. 

     

    DEFINITIONS
      AND REFERENCES 

     

    Section
      1.1. Terms
      Defined in the Original Agreement.
      Unless
      the context otherwise requires or unless otherwise expressly defined herein,
      the
      terms defined in the Original Agreement shall have the same meanings whenever
      used in this Amendment. 

     

    Section
      1.2. Other
      Defined Terms.
      Unless
      the context otherwise requires, the following terms when used in this Amendment
      shall have the meanings assigned to them in this Section 1.2. 

     

                                   
      “Amendment” means this First Amendment to Credit Agreement. 

     

                                   
      “Credit Agreement” means the Original Agreement as amended hereby.

     

    “Original
      Certificate” means the original Omnibus Certificate of Borrower dated as of
      June 27, 2005. 

     

    ARTICLE
      II. 

     

    AMENDMENTS
      TO ORIGINAL AGREEMENT 

     

    Section
      2.1. Defined
      Terms.
      The
      definition of “Current Assets” in Section 1.1 of the Original Agreement is
      hereby amended in its entirety to read as follows: 

     

    “'Current
      Assets'
      means
      the sum of the current assets of Borrower and its Consolidated Subsidiaries
      at
      such time, plus the Availability at such time in an amount not to exceed
      $50,000,000, but excluding, for purposes of this definition any non-cash gains
      for any Hedging Contract resulting from the requirements of SFAS 133 at such
      time.” 

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        Exhibit
          10.6

      

    

    ARTICLE
      III. 

     

    CONDITIONS
      OF EFFECTIVENESS 

     

    Section
      3.1. Effective
      Date.
      This
      Amendment shall become effective as of the date first above written when, and
      only when, (i) Agent shall have received, at Agent's office, a counterpart
      of
      this Amendment executed and delivered by Borrower and Majority Lenders and
      

    (ii)
      Agent shall have additionally received all of the following documents, each
      document (unless otherwise indicated) being dated the date of receipt thereof
      by
      Agent, duly authorized, executed and delivered, and in form and substance
      satisfactory to Agent: 

     

      (a)
      Officer's
      Certificate and Supporting Documents.
      Agent
      shall have received (i) a certificate of the Secretary and the President or
      Chief Financial Officer of Borrower certifying (A) that all of the
      representations and warranties set forth in Article IV hereof are true and
      correct and no Default exists, (B) that attached to the Original Certificate
      is
      a true and complete copy of resolutions adopted by the Board of Directors of
      Borrower authorizing the execution, delivery and performance of this Amendment
      and (C)
      as to
      the names and true signatures of the officers of Borrower authorized to sign
      this Amendment, and (ii) such supporting documents as Agent may reasonably
      request. 

      (b)
      Borrower shall have paid, in connection with such Loan Documents, all recording,
      handling, amendment and other fees required to be paid to Agent pursuant to
      any
      Loan Documents. 

      (c)
      Borrower shall have paid, in connection with such Loan Documents, all other
      fees
      and reimbursements to be paid to Agent pursuant to any Loan Documents, or
      otherwise due Agent and including fees and disbursements of Agent's attorneys.
      

    

    ARTICLE
      IV. 

     

    REPRESENTATIONS
      AND WARRANTIES 

     

    Section
      4.1. Representations
      and Warranties of Borrower.
      In
      order to induce each Lender to enter into this Amendment, Borrower represents
      and warrants to each Lender that: 

      (a)
      The
      representations and warranties contained in Article V of the Original Agreement
      are true and correct at and as of the time of the effectiveness hereof, except
      to the extent that the facts on which such representations and warranties are
      based have been changed by the extension of credit under the Credit Agreement
      except to the extent such representations and warranties specifically refer
      to
      an earlier date, in which case they are true and correct as of such earlier
      date. 

      (b)
      Borrower is duly authorized to execute and deliver this Amendment and is and
      will continue to be duly authorized to borrow monies and to perform its
      obligations under the Credit Agreement. Borrower has duly taken all corporate
      action necessary to authorize the execution and delivery of this Amendment
      and
      to authorize the performance of the obligations of Borrower hereunder.

      (c)
      The
      execution and delivery by Borrower of this Amendment, the performance by
      Borrower of its obligations hereunder and the consummation of the transactions
      contemplated hereby and thereby do not and will not conflict with any provision
      of law, statute, rule or regulation or of the certificate of incorporation
      and
      bylaws of Borrower, or of any material agreement, judgment, license, order
      or
      permit applicable to or binding upon Borrower, or result in the creation of
      any
      lien, charge or encumbrance upon any assets or properties of Borrower. Except
      for those which have been obtained, no consent, approval, authorization or
      order
      of any court or governmental authority or third party is required in connection
      with the execution and delivery by Borrower of this Amendment or to consummate
      the transactions contemplated hereby and thereby. 

      (d)
      When
      duly executed and delivered, this Amendment and the Credit Agreement will be
      a
      legal and binding obligation of Borrower, enforceable in accordance with its
      terms, except as limited by bankruptcy, insolvency or similar laws of general
      application relating to the enforcement of creditors' rights and by equitable
      principles of general application. 

      (e)
      The
      audited annual Consolidated financial statements of Borrower dated as of
      December 31, 2004 and the unaudited quarterly Consolidated financial statements
      of Borrower dated as of September 30, 2005 fairly present the Consolidated
      financial position at such dates and the Consolidated statement of operations
      and the changes in Consolidated financial position for the periods ending on
      such dates for Borrower. Copies of such financial statements have heretofore
      been delivered to each Lender. Since such dates no material adverse change
      has
      occurred in the financial condition or businesses or in the Consolidated
      financial condition or businesses of Borrower. 

    

     

    
      
        2

      

      
        
        

        
          

        

      

      
        Exhibit
          10.6

      

    

     

    ARTICLE
      V. 

     

    MISCELLANEOUS
      

     

    Section
      5.1. Ratification
      of Agreements.
      The
      Original Agreement as hereby amended is hereby ratified and confirmed in all
      respects. The Loan Documents, as they may be amended or affected by this
      Amendment, are hereby ratified and confirmed in all respects. Any reference
      to
      the Credit Agreement in any Loan Document shall be deemed to be a reference
      to
      the Original Agreement as hereby amended. The execution, delivery and
      effectiveness of this Amendment shall not, except as expressly provided herein
      or therein, operate as a waiver of any right, power or remedy of Lenders under
      the Credit Agreement, the Notes, or any other Loan Document nor constitute
      a
      waiver of any provision of the Credit Agreement, the Notes or any other Loan
      Document. 

     

    Section
      5.2. Survival
      of Agreements.
      All
      representations, warranties, covenants and agreements of Borrower herein shall
      survive the execution and delivery of this Amendment and the performance hereof,
      including without limitation the making or granting of the Loans, and shall
      further survive until all of the Obligations are paid in full. All statements
      and agreements contained in any certificate or instrument delivered by Borrower
      any Related Person/Restricted Person hereunder or under the Credit Agreement
      to
      any Lender shall be deemed to constitute representations and warranties by,
      and/or agreements and covenants of, Borrower under this Amendment and under
      the
      Credit Agreement. 

     

    Section
      5.3. Loan
      Documents.
      This
      Amendment is a Loan Document, and all provisions in the Credit Agreement
      pertaining to Loan Documents apply hereto and thereto. 

     

    Section
      5.4. Governing
      Law.
      This
      Amendment shall be deemed a contract made under the laws of the State of
      California and shall be construed and enforced in accordance with and governed
      by the laws of the State of California and the laws of the United States of
      America, without regard to principles of conflicts of law. 

     

    Section
      5.5. Counterparts;
      Fax.
      This
      Amendment may be separately executed in counterparts and by the different
      parties hereto in separate counterparts, each of which when so executed shall
      be
      deemed to constitute one and the same Amendment. This Amendment may be validly
      executed by facsimile or other electronic transmission. 

     

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

     

    [The
      remainder of this page has been intentionally left blank.]
      

     

     

    
      
        3

      

      
        
        

        
          

        

      

      
        Exhibit
          10.6

      

    

     

    IN
      WITNESS WHEREOF, this Amendment is executed as of the date first above written.
      

     

    BERRY
      PETROLEUM CORPORATION,
      as
      Borrower 

     

    By:
      Ralph
      J. Goehring Executive 

    Executive
      Vice President and Chief Financial Officer 

    

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION,
      as
      Administrative Agent, LC Issuer and a Lender 

     

    By:
      Guy
      C. Evangelista 

    Vice
      President 

    

    JPMORGAN
      CHASE BANK, N.A.,
      as a
      Lender 

     

    By:
      Jo
      Linda Papadakis

    Vice
      President

    

    BANK
      OF SCOTLAND,
      as a
      Lender 

     

    By: Karen
      Weich

    Assistant
      Vice Preside 

    

    BNP
      PARIBAS,
      as a
      Lender 

     

    By:
      Brian
      M. Malone

    Managing
      Director

     

    By:
      Polly
      Schott

    Vice
      President

    

    CITIBANK
      (WEST), FSB,
      as a
      Lender 

     

    By: Gai
      Sherman

    VP/Credit
      Relationship Mgr. 

    

    COMERICA
      BANK,
      as a
      Lender 

     

    By:
      Juli
      Bieser

    Vice
      President

    

    MIDFIRST
      BANK,
      as a
      Lender 

     

    By: Shawn
      D. Brewer

    Vice
      President 

    

    SOCIETE
      GENERALE,
      as a
      Lender 

     

    By:
      Josh
      Rogers

    Vice
      President

    

    UNION
      BANK OF CALIFORNIA, N.A.,
      as a
      Lender 

     

    By:
      Dustin Gaspari

    Vice
      President

     

     

     

    5

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