AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.1
THIS AMENDMENT NO. 3 to the SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the “Amendment”)
is dated September 17, 2007, by and among PETROQUEST ENERGY, L.L.C., a Louisiana limited liability
company (“Borrower”); JPMORGAN CHASE BANK, N.A. (individually as a lender and as agent,
“Agent”); each of the Guarantors set forth on the signature pages hereto and the financial
institutions set forth on the signature pages hereto, (“Lenders”).
R E C I T A L S:
WHEREAS, Borrower, PetroQuest Energy, Inc., a Delaware corporation (“Parent”), Agent,
Calyon New York Branch, as Syndication Agent; X.X. Xxxxxx Securities, Inc., as Sole Lead Arranger
and Sole Book Runner, and the Lenders have entered into a Second Amended and Restated Credit
Agreement dated November 18, 2005 (as the same may have been and may hereafter be amended from time
to time, the “Credit Agreement”), pursuant to which Borrower amended and restated a
previously existing credit facility dated May 13, 2003; and
WHEREAS, Borrower, Parent, Agent and the Lenders desire to amend the Credit Agreement as
herein set forth.
NOW THEREFORE, in consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. Except as otherwise provided below, unless the context hereof
indicates otherwise, all capitalized terms used herein shall have the same meaning as such
capitalized terms are defined in the Credit Agreement.
2. Amendments to the Credit Agreement. The Credit Agreement is, subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, hereby amended as follows:
(a) Section 2.2.1, Borrowing Base, of the Credit Agreement is hereby amended by
deleting the section in its entirety and substituting the following:
“2.2.1 Until the date as of which the Borrowing Base is next redetermined
pursuant to Section 2.2.2, the Borrowing Base shall be $80,000,000, as reduced by
Section 2.2.5.”
(b) Section 6.13, Sale of Assets, of the Credit Agreement is hereby amended by
deleting the section in its entirety and substituting the following:
“6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other Person,
except:
(i) | the sales of Hydrocarbons in the ordinary course of business. | ||
(ii) | transfers of interests in Oil and Gas Properties in the ordinary course of the joint development of Oil and Gas Properties with others, including without limitation transfers to other parties to joint development agreements, participation agreements, farmout agreements, farmin agreements, exploration agreements, operating agreements and unit agreements; | ||
(iii) | the sale or transfer of equipment that is obsolete, worn-out, depleted or no longer necessary for their business or is replaced by equipment of at least comparable value and use; | ||
(iv) | during any consecutive twelve month period, sales of Oil and Gas Properties in the ordinary course that will not exceed, in the aggregate, five percent (5%) of the Borrowing Base then in effect, and that will not materially impair or diminish the value of the Collateral or the Borrower’s financial condition; | ||
(v) | the sale or other disposition of approximately 180 miles of gathering systems with current throughput of approximately 30 million cubic feet per day located in the Woodford Shale trend in southeast Oklahoma; and | ||
(vi) | leases, sales or other dispositions of Oil and Gas Properties, other than those permitted in subsections (i) through (v) above, that, during any consecutive twelve-month period, do not constitute a Substantial Portion of the Oil and Gas Properties of the Borrower and its Subsidiaries. |
Upon the written request of the Borrower setting forth in reasonable detail
the transfer, sale or conveyance of assets in a transaction which may be
permitted above, the Agent will execute and deliver to the Borrower such
documentation as is reasonably necessary in the opinion of the Agent and its
counsel to release the Lender Liens on assets so transferred, sold or
conveyed.”
3. Limited Waiver. Borrower has requested, and Agent and the Lenders have approved, a
deviation from compliance with the covenant set forth in Section 6.28.2 of the Credit Agreement for
all periods prior to the date hereof through the period ending December 31, 2007. At the
expiration of the previously described time period, Borrower must be in compliance with such
covenant. It is understood and agreed that the consent of Agent and the Lenders to the deviation
set forth above shall in no way act as a waiver of any other covenants, restrictions, rights or
remedies with respect to the Credit Agreement, but that such deviation shall apply only to the
specific matter and instance set forth hereinabove.
4. Conditions Precedent to Effectiveness of Amendment. This Amendment shall become
effective when, and only when, each of the conditions below has been complied with to the
satisfaction of the Agent and the Lenders and the documents required below have been delivered to
the Agent and the Lenders:
(a) Counterparts of this Amendment duly executed by Borrower, Guarantors and Lenders;
(b) A copy of the resolutions approving this Amendment, and authorizing the
transactions contemplated herein duly adopted by the Managers of Borrower, accompanied by a
certificate of the duly authorized Secretary of Borrower, certifying that such copy is a
true and correct copy of the resolutions duly adopted by the Managers of Borrower, and that
such resolutions constitute all the resolutions adopted with respect to such transactions,
and have not been amended, modified or revoked in any respect and are in full force and
effect as of the date hereof;
(c) A copy of the resolutions approving this Amendment, and authorizing the
transactions contemplated herein duly adopted by the Board of Directors or Members of each
Guarantor, as the case may be, accompanied by a certificate of the duly authorized Secretary
of such Guarantor, certifying that such copy is a true and correct copy of the resolutions
duly adopted by the Board of Directors or Members of such Guarantor, and that such
resolutions constitute all the resolutions adopted with respect to such transactions, and
have not been amended, modified or revoked in any respect and are in full force and effect
as of the date hereof;
(d) Payment of all fees (to be determined)required to be paid to the Lenders in
connection with this Amendment;
(e) Payment by Borrower of the fees and expenses of counsel to Lenders in connection
with the preparation and negotiation of this Amendment and all documents and instruments
contemplated hereby; and
(f) The execution and delivery of such additional documents and instruments which the
Agent and its counsel may deem necessary to effectuate this Amendment or any document
executed and delivered to Lenders in connection herewith or therewith.
5. Representations and Warranties of Borrower. Borrower represents and warrants as
follows:
(a) Borrower and Guarantors are each duly authorized and empowered to execute, deliver
and perform this Amendment and all other instruments referred to or mentioned herein to
which it is a party, and all action on its part requisite for the due execution, delivery
and the performance of this Amendment has been duly and effectively taken. This Amendment,
when executed and delivered, will constitute valid and binding obligations of Borrower and
Guarantors, as the case may be, enforceable against such party in accordance with its terms.
This Amendment does not violate any provisions of the Articles of Organization or limited
liability agreement of Borrower, the Certificate of Incorporation or By-Laws of any
Guarantor, or any contract, agreement,
law or regulation to which Borrower or Guarantors are subject, and does not require the
consent or approval of any regulatory authority or governmental body of the United States or
any state;
(b) After giving affect to this Amendment, the representations and warranties contained
in the Credit Agreement, as amended hereby, and any other Loan Document executed in
connection herewith or therewith, are true, correct and complete on and as of the date
hereof as though made on and as of the date hereof; and
(c) After giving affect to this Amendment, no event has occurred and is continuing
which constitutes a Default or Unmatured Default.
6. Reference to and Effect on the Loan Documents.
(a) Upon the satisfaction of the conditions contained in Section 3 hereof each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or
words of like import, and each reference in the Loan Documents shall mean and be a reference
to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement, the Notes, and all
other instruments securing or guaranteeing Borrower’s obligations to Lenders, including the
Collateral Documents, as amended (collectively, the “Security Instruments”), shall
remain in full force and effect and are hereby ratified and confirmed. Without limiting the
generality of the foregoing, the Security Instruments and all collateral described therein
do and shall continue to secure the payment of all obligations of Borrower and Guarantors
under the Credit Agreement, as amended hereby, and the Notes, and under the other Security
Instruments.
(c) Each of the Guarantors hereby expressly (i) acknowledges the terms of this
Amendment; (ii) ratifies and affirms its obligations under its Guaranty Agreement dated
November 18, 2005, in favor of the Agent and the Lenders; (iii) acknowledges, renews and
extends its continued liability under its Guaranty Agreement and agrees that its Guaranty
Agreement remains in full force and effect; and (iv) guarantees to the Agent and the Lenders
to promptly pay when due all amounts owing or to be owing by it under its Guaranty Agreement
pursuant to the terms and conditions thereof.
(d) The execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of Lender under any of the Security Instruments, nor
constitute a waiver of any provision of any of the Security Instruments.
7. Waiver. As additional consideration for the execution, delivery and performance of
this Amendment by the parties hereto and to induce Lenders to enter into this Amendment, Borrower
and Guarantors each warrants and represents to Lenders that, to the knowledge of Borrower and
Guarantors, no facts, events, statuses or conditions exist or have existed which, either now or
with the passage of time or giving of notice, or both, constitute or will constitute a basis for
any claim or cause of action against Lenders or any defense to (i) the payment of any obligations
and indebtedness under the Notes and/or the Security Instruments, or (ii) the performance of any of
its obligations with respect to the Notes and/or the Security Instruments,
and in the event any such facts, events, statuses or conditions exist or have existed,
Borrower and Guarantors each unconditionally and irrevocably waive any and all claims and causes of
action against Lenders and any defenses to its payment and performance obligations in respect to
the Notes and the Security Instruments arising prior to the date of this Amendment.
8. Costs and Expenses. Borrower agrees to pay on demand all costs and expenses of
Lenders in connection with the preparation, reproduction, execution and delivery of this Amendment
and the other instruments and documents to be delivered hereunder, including the reasonable fees
and out-of-pocket expenses of counsel for Lenders. In addition, Borrower shall pay any and all
fees payable or determined to be payable in connection with the execution and delivery, filing or
recording of this Amendment and the other instruments and documents to be delivered hereunder, and
agrees to save Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omitting to pay such fees.
9. Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument.
10. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of Texas.
11. Final Agreement. THIS WRITTEN AMENDMENT REPRESENTS 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 BETWEEN THE PARTIES.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed in
multiple counterparts, each of which is an original instrument for all purposes, all as of the day
and year first above written.
“Borrower” PETROQUEST ENERGY, L.L.C. By: PetroQuest Energy Inc., its sole member |
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By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxxx | |||
Title: | Chief Financial Officer | |||
“Guarantors” PETROQUEST ENERGY, INC. |
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By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxxx | |||
Title: | Chief Financial Officer | |||
PITTRANS, INC. |
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By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxxx | |||
Title: | Chief Financial Officer | |||
TDC ENERGY, LLC |
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By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxxx | |||
Title: | Chief Financial Officer | |||
“Lenders” JPMORGAN CHASE BANK, N.A., As the Agent, a Lender and LC Issuer |
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By: | /s/ Jo Xxxxx Xxxxxxxxx | |||
Name: | Jo Xxxxx Xxxxxxxxx | |||
Title: | Vice President | |||
CALYON NEW YORK BRANCH, As a Lender and as Syndication Agent |
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By: | /s/ Xxxxxxxx Cord'homme | |||
Name: | Xxxxxxxx Cord'homme | |||
Title: | Director | |||
By: | /s/ Xxxxxxx Xxxxxx | |||
Name: | Xxxxxxx Xxxxxx | |||
Title: | Vice President | |||
MACQUARIE BANK LIMITED, As a Lender |
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By: | /s/ Xxxxxx Xxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxx | |||
Title: | Division Director | |||
By: | /s/ Xxxxxx Xxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxx | |||
Title: | Attorney | |||