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Exhibit 7(c)(c)
FIRST AMENDMENT TO CREDIT AGREEMENT
DATED MAY 29,1998
BETWEEN
NORTH COAST ENERGY, INC. ("BORROWER")
AND
ING (U.S.) CAPITAL CORPORATION, AS AGENT
AND CERTAIN FINANCIAL INSTITUTIONS, AS LENDERS
Document List
The following documents are required under the terms of the First Amendment to
Credit Agreement dated May 29, 1998 (the "First Amendment"), which amends that
certain Credit Agreement dated as of February 9, 1998 (as so amended, the
'Credit Agreement") between Borrower, ING (U.S.) Capital Corporation, as Agent
("Agent") and certain financial institutions as lenders ("Lenders") in order to
satisfy certain conditions precedent to the Credit Agreement and to the
obligation of Lenders to advance funds to Borrower. Terms defined in the Credit
Agreement and used but not defined herein have the meanings given them in the
Credit Agreement.
SECTION 1. PRINCIPAL DOCUMENTS
1. First Amendment to Credit Agreement.
2. Promissory Note payable by Borrower to ING (U.S.) Capital Corporation, as a
Lender, in the stated principal amount of $25,000,000 of even date with the
First Amendment.
3. Open End Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement from Borrower to Agent to be recorded in Ohio (the
"Kelt Mortgage").
4. Financing Statements executed by Borrower in connection with the Kelt
Mortgage.
5. Borrowing Notice.
6. Wiring Instructions Letter.
SECTION II. CORPORATE RECORDS AND PROCEEDINGS
7. Omnibus Certificate of the President and Secretary of Borrower dated as of
May 29, 1998.
8. Certificate of Borrower's due incorporation, valid existence, and good
standing in the States of Delaware and Ohio.
9. Compliance Certificate of the President and the Chief Financial Officer of
Borrower.
SECTION III. OPINIONS
10. Opinion of ▇▇▇▇▇▇ ▇▇▇▇ Esq., General Counsel for the Restricted Persons.
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FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment")
made as of May 29, 1998 by and between North Coast Energy, Inc. a Delaware
corporation ("Borrower"), and ING (U.S.) Capital Corporation, as Agent and as a
Lender (herein called "Agent'), and the other Lenders from time to time parties
to the Credit Agreement,
WITNESSETH:
WHEREAS, Borrower, Agent and Lenders have entered into that certain
Credit Agreement dated as of February 9, 1998 (as from time to time further
supplemented, amended, or restated, the "Original Agreement") for the purposes
and consideration therein expressed, pursuant to which Lenders became obligated
to make loans to Borrower as therein provided; and
WHEREAS, Borrower, Agent, and Lenders desire to amend the Original
Agreement as provided 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. I 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.
"AMENDMENT DOCUMENTS" means this Amendment and the Renewal Note.
"CREDIT AGREEMENT" means the Original Agreement as amended
hereby.
"ORIGINAL NOTE" means the "Note" referred to and defined as such
in the Original Agreement.
"RENEWAL NOTE" has the meaning given to such term in Section 3.1
of this Amendment.
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"SECURITY DOCUMENTS" has the meaning given to such term in
Section 3.1 of this Amendment.
ARTICLE II.
Amendments to Original Agreement
--------------------------------
Section 2.1. DEFINED TERMS. The following definitions in Section 1.1 of
the Original Agreement are hereby amended in their entirety to read as follows:
"BASE RATE MARGIN" means three-quarters of one percent (.75%)
per annum."
"EURODOLLAR MARGIN" means, on each day, two and one-half percent
(2.50%) per annum."
"MAXIMUM LOAN AMOUNT" means the amount of $25,000,000."
The following definitions are hereby added to Section 1. 1 of the Original
Agreement:
"ADJUSTED CASH FLOW" means, in respect of any period, the remainder of (a) all
revenue of Borrower and its Subsidiaries received during such period on a cash
basis plus any decrease in Working Capital or minus any increase in Working
Capital from the last day of the preceding period, minus (b) each of the
following: (i) actual lease operating expenses (incurred in the manner of a
reasonable prudent operator consistent with Borrower's past practices), actual
transportation and processing expenses, and actual ad valorem, severance,
franchise and income taxes paid by Borrower and its Subsidiaries during such
period on a cash basis, (ii) capital expenditures necessary for the maintenance
of existing production under currently employed methods paid by Borrower and its
Subsidiaries during such period on a cash basis, (iii) interest paid by Borrower
and its Subsidiaries during such period on a cash basis and (iv) general and
administrative expenses (not to exceed $210,000 per month) paid by Borrower and
its Subsidiaries during such period on a cash basis. As used herein, "Working
Capital" means in respect of any period, accounts receivable minus accounts
payable as of the last day of such period.
"KELT" means Kelt Ohio, Inc., a Delaware corporation.
"KELT DOCUMENTS" means (i) that certain Purchase and Sale Agreement by
and between Borrower and Kelt dated as of April 8, 1998, (the "P/S Agreement")
and (ii) that certain Deed, Assignment, and ▇▇▇▇ of Sale by and between Borrower
and Kelt executed pursuant to the P/S Agreement.
Section 2.2. USE OF PROCEEDS. The first sentence of Section 2.4 of the
Original Agreement is hereby amended in its entirety to read as follows:
"Borrower shall use all Loans to refinance existing
indebtedness, to finance capital expenditures, to refinance Matured LC
Obligations, to provide working capital for its operations, to consummate the
transaction under the Kelt Documents, and for other purposes as Majority Lenders
in their sole discretion may from time to time determine."
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Section 2.3. PREPAYMENTS. Section 2.7 of the Original Agreement is hereby
amended to read in its entirety as follows:
"Section 2.7. Mandatory and Scheduled Prepayments.
------------------------------------
"(a) If at any time the Facility Usage is in excess of the
Borrowing Base (such excess being herein called a "Borrowing Base Deficiency"),
Borrower shall, within forty-five Business Days after Agent gives notice of such
fact to Borrower, prepay the principal amount of the Loans in an aggregate
amount at least equal to such Borrowing Base Deficiency (or, if the Loans have
been paid in full, pay to LC issuer LC Collateral as required under Section
2.16(a)). Any principal or interest prepaid pursuant to this Section 2.7(a)
shall be in addition to, and not in lieu of, all payments otherwise required to
be paid under the Note or the other Loan Documents at the time of such
prepayment.
"(b) At the termination of the Commitment Period, the principal
amount of the Note shall be due and payable in 20 quarterly installments, each
of which shall be equal to one-twentieth (1/20th) of the aggregate unpaid
principal balance of the Note at the end of the Commitment Period and shall be
due and payable on the last day of each Fiscal Quarter, beginning September 30,
1999, and continuing regularly thereafter until June 30, 2004, at which time the
unpaid principal balance of this Note and all accrued interest shall be due and
payable.
"(c) If Borrower shall not have received by September 4, 1998
cash proceeds from the issuance of common stock to Nuon International, b.v., an
entity organized under the laws of the Kingdom of the Netherlands, of at least
$5,000,000, the Commitment shall immediately terminate and, in place of the
amortization schedule in the preceding Section 2.7(b), the principal amount of
the Note shall due and payable follows:
"(i) on the last Business Day of each calendar month
Borrower shall make a payment of principal on the Note equal to one hundred
percent (100%) of Adjusted Cash Flow for the immediately preceding calendar
month, such payments to begin on September 30, 1998 and to continue to and
including the earlier of (A) the month in which the outstanding principal
balance on the Note is equal to or less than $20,000,000 or (B) the last
Business Day of June, 1999; and
"(ii) if the principal amount of the Note exceeds
$20,000,000 on the last Business Day of June, 1999, Borrower shall make a
payment of principal on the Note equal to the amount of such excess; and
"(iii) the balance of the Note shall be due and payable in
twenty (20) quarterly installments on the last Business Day of each third
calendar month thereafter (i.e., if the last payment under paragraph (i) or (ii)
is June, 1999, the payments under this paragraph (iii) will be due on September
30, 1999 and on the last Business Day of each December, March, June and
September thereafter), each such installment to be in the principal amount of $
1,000,000, until the unpaid principal balance of the Note and all interest
accrued thereon shall be paid in full. The balance of all accrued interest and
principal, if not sooner paid, shall be due and payable on June 30, 2004.
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Each payment of principal under this section shall be accompanied by all
interest then accrued and unpaid on the principal so prepaid."
Section 2.4. KELT TRANSACTION: The following Section 5.18 is hereby
added to the Original Agreement:
"Section 5.18 KELT TRANSACTION. Upon the payment by Borrower
of the purchase price for the properties to be conveyed to Borrower under the
Kelt Documents, Kelt shall have complied with each of the covenants and
conditions contained in the Kelt Document, and each of the Kelt Documents will
be a legal and binding instrument and agreement of Kelt, enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency and
similar laws applying to creditors' rights generally and by principles of equity
applying to creditors' rights generally."
Section 2.5. BORROWING BASE. Pursuant to Section 2.9 of the Credit
Agreement, Agent hereby notifies Borrower that the new Borrowing Base available
under the Credit Agreement from the date hereof until the next Determination
Date shall be 25,000,000.
ARTICLE III.
Section 3.1. CONDITION OF EFFECTIVENESS. This Amendment shall become
effective as of the date first above written when and only when each of the
following conditions shall have been satisfied:
(a) Agent shall have received, at Agent's office, each of the following
in form, substance and date satisfactory to Agent: (i) a counterpart of this
Amendment executed and delivered by Borrower, (ii) a favorable report of Pilko &
Associates, Inc. regarding their environmental assessment of the material
properties of Kelt acquired by Borrower pursuant to the Kelt Documents in scope
and results acceptable to Agent, (iii) favorable title opinions regarding
properties of Kelt acquired by Borrower pursuant to the Kelt Documents in scope
and results acceptable to Agent, (iv) certain documents of the type contemplated
by Section 6.15 of the Credit Agreement executed by Borrower granting to Agent
on behalf of Lenders a first priority lien and security interest in all of the
assets of Borrower acquired from Kelt pursuant to the Kelt Documents (the
"Security Documents"), and (v) a promissory note with appropriate insertions in
the form attached hereto as Exhibit A (such note being herein called the
"Renewal Note") duly executed on behalf of Borrower, dated the date hereof, and
expressly renewing the Original Note,
(b) Borrower shall have paid to Agent an arrangement fee in the amount
of $225,000 in immediately available funds,
(c) Agent shall have received a written opinion of counsel for
Borrower, dated as of the date of this Amendment, addressed to Agent, to the
effect that this Amendment, the Renewal Note, the Security Documents and the
Kelt Documents have been duly authorized, executed and delivered by Borrower and
that the Credit Agreement, the Renewal Note, the Security Documents and the Kelt
Documents constitute the legal, valid and binding obligations of Borrower,
enforceable in accordance with their terms (subject, as to enforcement of
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remedies, to applicable bankruptcy, reorganization, insolvency and similar laws
and to general principles of equity) and such other matters of Agent may
require,
(d) The transactions under the Kelt Documents have been
contemporaneously consummated, Kelt shall have complied with each of the
covenants and conditions contained in the Kelt Documents,
(e) Agent shall have received a certificate of a duly authorized
officer of Borrower dated the date of this Amendment certifying: (i) that all of
the representations and warranties set forth in Article IV hereof are true and
correct at and as of the time of such effectiveness; and (ii) as to such other
corporate matters as Agent shall deem necessary, and
(f) Agent shall have additionally received such other documents as
Agent may reasonably request.
ARTICLE IV.
Representations and Warranties
------------------------------
Section 4. 1. Representations and Warranties of Borrower. In order to
induce Agent to enter into this Amendment, Borrower represents and warrants to
Agent that:
(a) The representations and warranties contained in Article V
of the of the Original Agreement (as amended hereby) are true and correct at and
as of the time of the effectiveness hereof.
(b) Borrower is duly authorized to execute and deliver this
Amendment, the Renewal Note, the Security Documents and the Kelt Documents and
is and will continue to be duly authorized to borrow 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,
Renewal Note, the Security Documents and the Kelt Documents and to authorize the
performance of the obligations of Borrower hereunder and thereunder.
(c) The execution and delivery by Borrower of this Amendment,
Renewal Note, the Security Documents and the Kelt Documents, the performance by
Borrower of its obligations hereunder and thereunder 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 articles 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 duly 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, the Renewal Note, the Security Documents and the Kelt Documents or to
consummate the transactions contemplated hereby and thereby.
(d) When duly executed and delivered, each of this Amendment,
the Credit Agreement, the Renewal Note, the Security Documents and the Kelt
Documents will be a legal
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and binding instrument and agreement of Borrower, enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency and similar laws applying
to creditors' rights generally and by principles of equity applying to
creditors' rights generally.
(e) The audited annual financial statements of Borrower dated
as of March 31, 1997, and the unaudited quarterly financial statements of
Borrower dated December 3 1, 1997 fairly present the financial position at such
dates and the statement of operations and the changes in financial position for
the periods ending on such dates for Borrower. Copies of such financial
statements have heretofore been delivered to Agent. Since December 31, 1997, no
material adverse change has occurred in the financial condition or businesses of
Borrower.
ARTICLE V.
Miscellaneous
-------------
Section 5. 1. RATIFICATION OF AGREEMENTS. The Original Agreement as
hereby amended is hereby ratified and confirmed in all respects. Any reference
to the Credit Agreement in any Loan Document shall be deemed to refer to this
Amendment also. Any reference to the Note in any other Loan Document shall be
deemed to be a reference to the Renewal Note issued and delivered pursuant to
this Amendment. The execution, delivery and effectiveness of this Amendment and
the Renewal Note shall not, except as expressly provided herein or therein,
operate as a waiver of any right, power or remedy of Agent under the Credit
Agreement or any other Loan Document nor constitute a waiver of any provision of
the Credit Agreement 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 Loan and the issuance and delivery of
the Renewal Note, 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 any Restricted Person hereunder or under the Credit
Agreement to Agent shall be deemed to constitute representations and warranties
by, or agreements and covenants of, Borrower under this Amendment and under the
Credit Agreement.
Section 5.3. LOAN DOCUMENTS. This Amendment and the Renewal Note are
each 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 governed by and
construed in accordance with the laws of the State of New York and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.
Section 5.5. COUNTERPARTS. 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 AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
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EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
NORTH COAST ENERGY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
----------
ING (U.S.) CAPITAL CORPORATION
By:
-------------------------
Name:
Title:
IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
NORTH COAST ENERGY, INC.
By:
-------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Associate
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EXHIBIT A
PROMISSORY NOTE
---------------
$25,000,000 New York, New York May___, 1998
FOR VALUE RECEIVED, the undersigned, North Coast Energy, Inc., a
Delaware (herein called "Borrower"), hereby promises to pay to the order of ING
(U.S.) Capital Corporation, (herein called "Lender"), the principal sum of
Twenty Five Million and No/100 Dollars ($25,000,000), or, if greater or less,
the aggregate unpaid principal amount of the Loan made under this Note by Lender
to Borrower pursuant to the terms of the Credit Agreement (as hereinafter
defined), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided in
lawful money of the United States of America at the offices of the Agent under
the Credit Agreement, as from time to time may be designated by the holder of
this Note.
This Note (a) is issued and delivered under that certain Credit
Agreement dated as of February 9, 1998, among Borrower, Lender, as Agent, and
the lenders (including Lender) referred to therein (herein, as from time to time
supplemented, amended or restated, called the "Credit Agreement"), and is a
"Note" as defined therein, (b) is subject to the terms and provisions of the
Credit Agreement, which contains provisions for payments and prepayments
hereunder and acceleration of the maturity hereof upon the happening of certain
stated events, and (c) is secured by and entitled to the benefits of certain
Security Documents (as identified and defined in the Credit Agreement). Payments
on this Note shall be made and applied as provided herein and in the Credit
Agreement. Reference is hereby made to the Credit Agreement for a description of
certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to terms used and not defined herein and to
the Security Documents for a description of the nature and extent of the
security thereby provided and the rights of the parties thereto.
For the purposes of this Note, the following terms have the meanings
assigned to them below:
"Base Rate Payment Date" means (i) the last day of each Fiscal Quarter,
beginning June 30, 1998, and (ii) any day on which past due interest or
principal is owed hereunder and is unpaid. If the terms hereof or of the Credit
Agreement provide that payments of interest or principal hereon shall be
deferred from one Base Rate Payment Date to another day, such other day shall
also be a Base Rate Payment Date.
"Eurodollar Rate Payment Date" means, with respect to any Eurodollar
Loan: (i) the day on which the related Interest Period ends (and, if such
Interest Period is three months or longer, the three-month anniversary of the
first day of such Interest Period),
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and (ii) any day on which past due interest or past due principal is owed
hereunder with respect to such Eurodollar Loan and is unpaid. If the terms
hereof or of the Credit Agreement provide that payments of interest or principal
with respect to such Eurodollar Loan shall be deferred from one Eurodollar Rate
Payment Date to another day, such other day shall also be a Eurodollar Rate
Payment Date.
The principal amount of this Note shall be due and payable in
twenty-two (22) quarterly installments, each of which shall be equal to
one-twenty-second (1/22) of the aggregate unpaid principal balance of this Note
at the end of the Commitment Period, and shall be due and payable on the last
day of each Fiscal Quarter, beginning September 30, 1999, and continuing
regularly on the thereafter until December 31, 2004, at which time the unpaid
principal balance of this Note and all interest accrued hereon shall be due and
payable in full.
Base Rate Loans from time to time outstanding shall bear interest on
each day outstanding at the Base Rate in effect on such day; unless the Default
Rate shall apply as provided below. On each Base Rate Payment Date Borrower
shall pay to the holder hereof all unpaid interest which has accrued on the Base
Rate Loans to but not including such Base Rate Payment Date. Each Eurodollar
Loan shall bear interest on each day during the related Interest Period at the
related Eurodollar Rate in effect on such day; unless the Default Rate shall
apply as provided below. On each Eurodollar Rate Payment Date relating to such
Eurodollar Loan, Borrower shall pay to the holder hereof all unpaid interest
which has accrued on such Eurodollar Loan to but not including such Eurodollar
Rate Payment Date. All past due principal of and past due interest on the Loan
shall bear interest on each day outstanding at the Default Rate in effect on
such day, notwithstanding the foregoing provisions of this paragraph, on or
after ten days following the occurrence of an Event of Default, and during the
continuance thereof, each Loan shall bear interest at the Default Rate. All
interest at the Default Rate shall be due and payable daily as it accrues.
Notwithstanding the foregoing provisions of this paragraph: (a) this Note shall
never bear interest in excess of the Highest Lawful Rate, and (b) if at any time
the rate at which interest is payable on this Note is limited by the Highest
Lawful Rate (by the foregoing clause (a) or by reference to the Highest Lawful
Rate in the definitions of Base Rate, Eurodollar Rate, and Late Payment Rate),
this Note shall bear interest at the Highest Lawful Rate and shall continue to
bear interest at the Highest Lawful Rate until such time as the total amount of
interest accrued hereon equals (but does not exceed) the total amount of
interest which would have accrued hereon had there been no Highest Lawful Rate
applicable hereto.
Notwithstanding the foregoing paragraph and all other provisions of
this Note, in no event shall the interest payable hereon, whether before or
after maturity, exceed the maximum interest which, under applicable Law, may be
charged on this Note, and this Note is expressly made subject to the provisions
of the Credit Agreement which more fully set out the limitations on how interest
accrues hereon.
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If this Note is placed in the hands of an attorney for collection after
default, or if all or any part of the indebtedness represented hereby is proved,
established or collected in any court or in any bankruptcy, receivership, debtor
relief, probate or other court proceedings, Borrower and all endorsers, sureties
and guarantors of this Note jointly and severally agree to pay reasonable
attorneys' fees and collection costs to the holder hereof in addition to the
principal and interest payable hereunder.
Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration of
the maturity of this Note, diligence in collecting, the bringing of any suit
against any party and any notice of or defense on account of any extensions,
renewals, partial payments or changes in any manner of or in this Note or in any
of its terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.
This Note is executed in renewal, modification, and extension of, but
not in extinguishment or novation of, that certain Promissory Note of Borrower
dated February 9, 1998, in the stated principal amount of $20,000,000, payable
to the order of Lender.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY APPLICABLE
FEDERAL LAW.
NORTH COAST ENERGY, INC.
By:
-----------------------------
Name:
Title:
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CONSENT AND AGREEMENT
---------------------
North Coast Operating Company (the "Company") and each of the
partnerships party hereto (the "Partnerships") hereby consent to the provisions
of this Amendment and the transactions contemplated herein (including without
limitation the execution and delivery of the Renewal Note and the other
Amendment Documents), and hereby ratify and confirm the Open End Mortgage,
Assignment, Security Agreement, Fixture Filing and Financing Statement in favor
of Agent dated as of February 9, 1998 recorded in various counties in the State
of Ohio and the Open End Mortgage, Assignment, Security Agreement, Fixture
Filing and Financing Statement dated as of February 9, 1998 recorded in various
counties in the State of Pennsylvania made by the Company and the Partnerships
for the benefit of Agent, and agrees that the Company's and the Partnerships'
obligations and covenants thereunder are unimpaired hereby and shall remain in
full force and effect.
Date: May 29,1998
NORTH COAST OPERATING COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
Capital Drilling Fund
1986-1 Limited Partnership
North Coast Energy/Capital 1987-1
Appalachian Private Drilling
Program L.P.
North Coast Energy/Capital 1987-2
Appalachian Private Drilling
Program L.P.
North Coast Energy/Capital 1988-1
Appalachian Private Drilling
Program L.P.
North Coast Energy/Capital 1988-2
Appalachian Private Drilling
Program L.P.
13
North Coast Energy 1989 Appalachian
Public Drilling Program L.P.
North Coast Energy 1990-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1990-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1990-3
Appalachian Private Drilling
Program L.P.
North Coast Energy 1991-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1991-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1991-3
Appalachian Private Drilling
Program L.P.
North Coast Energy 1992-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1992-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1992-3
Appalachian Private Drilling
Program L.P.
North Coast Energy 1993-1
Appalachian Private Drilling
Program L.P.
14
North Coast Energy 1993-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1993-3
Appalachian Private Drilling
Program L.P.
North Coast Energy 1994-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1994-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1994-3
Appalachian Private Drilling
Program L.P.
North Coast Energy 1995-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1995-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1996-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1996-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1997-1
Appalachian Private Drilling
Program L.P.
15
North Coast Energy 1997-2
Appalachian Private Drilling
Program L.P.
By: NORTH COAST OPERATING COMPANY, general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
