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EXHIBIT 10.14
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT is dated and effective as of
December 31, 2000 (the "First Amendment"), among PETROQUEST ENERGY, L.L.C., a
Louisiana limited liability company and the successor by merger to PetroQuest
Energy, Inc., a Louisiana corporation, and the successor by name change to
PetroQuest Energy One, L.L.C. (herein called the "LLC"), PETROQUEST ENERGY,
INC., a Delaware corporation (herein called the "Guarantor"), and HIBERNIA
NATIONAL BANK, a national banking association (herein called the "Bank").
R E C I T A L S:
1. PetroQuest Energy, Inc., a Louisiana corporation ("PE-LA."),
PetroQuest Energy One, L.L.C., a Louisiana limited liability company ("PEO"),
the Guarantor and the Bank have heretofore entered into that certain Credit
Agreement dated December 21, 2000 (the "Credit Agreement"), pursuant to which
the Bank established in favor of PEO and PE-LA., as in solido co- borrowers, a
revolving line of credit.
2. Effective December 31, 2000, PE-LA. merged into PEO, with PEO as the
surviving entity, and PEO then changed its name to PetroQuest Energy, L.L.C. As
a result of the merger, the Guarantor now owns one hundred percent (100%) of the
membership interest in the LLC.
3. The purpose of this First Amendment is to evidence that the Borrower
under the Credit Agreement is now the LLC, and to address certain other matters
necessitated by the foregoing merger and name change
4. Capitalized terms used herein which are defined or used in the
Credit Agreement are used herein with such meanings, except as may be otherwise
expressly provided in this First Amendment.
NOW, THEREFORE, THE PARTIES HERETO, IN CONSIDERATION OF THE MUTUAL
COVENANTS HEREINAFTER SET FORTH AND INTENDING TO BE LEGALLY BOUND HEREBY, AGREE
AS FOLLOWS:
A. AMENDMENTS TO DEFINITIONS.
(1). The following definition in Section 1.1 of the Agreement
are hereby restated as follows:
"BORROWER" shall mean PetroQuest Energy, L.L.C., a Louisiana
limited liability company and the successor by merger to
PetroQuest Energy, Inc., a Louisiana corporation and the
successor by name change to PetroQuest Energy One, L.L.C., a
Louisiana limited liability company, together with its
successors and assigns.
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(2). The following new definitions are hereby added to the
Agreement:
"CREDIT AGREEMENT" shall mean the Agreement.
"FIRST AMENDMENT" shall mean that certain First Amendment to
Credit Agreement dated December 31, 2000, among the LLC, the
Guarantor, and the Bank.
"LIABILITIES" shall mean, as to any Person, all indebtedness,
liabilities and obligations of such Person, whether matured or
unmatured, liquidated or unliquidated, primary or secondary,
direct or indirect, absolute, fixed or contingent, and whether
or not required to be considered pursuant to GAAP.
"LLC" shall have the same meaning as the word "Borrower."
"MERGER" shall mean the merger of PE-LA. into PEO and the
change of name by PEO to the LLC, all effective as of December
31, 2000.
"NON-RECOURSE INDEBTEDNESS" shall mean Obligations of an
Unrestricted Subsidiary which is not a Liability, in whole or
part, of any Restricted Person and which is not secured by any
Encumbrance upon any property or assets of any Restricted
Person, provided that no such Obligations of an Unrestricted
Subsidiary shall be considered "Non-Recourse Indebtedness" if
any default with respect to such Obligations would allow or
require any Obligations which is owed by one or more of the
Restricted Persons to be accelerated or otherwise made payable
in advance of its stated maturity.
"OBLIGATIONS" of any Person means Liabilities in any of the
following categories: (a) Liabilities for borrowed money; (b)
Liabilities constituting an obligation to pay the deferred
purchase price of property or services; (c) Liabilities
evidenced by a bond, debenture, note or similar instrument;
(d) Liabilities which (i) would under GAAP be shown on such
Person's balance sheet as a liability, and (ii) are payable
more than one year from the date of creation thereof (other
than reserves for taxes and reserves for contingent
obligations); (e) Liabilities arising under Hedging
Agreements; (f) Liabilities constituting principal under
leases capitalized in accordance with GAAP, (g) Liabilities
arising under conditional sales or other title retention
agreements; (h) Liabilities owing under direct to indirect
guaranties of Obligations of any other Person or otherwise
constituting obligations to purchase or acquire or to
otherwise protect or insure a creditor against loss in respect
of Obligations of any other Person (such as obligations under
working capital maintenance agreements, agreements to
keep-well, or agreements to purchase Obligations, assets,
goods, securities or services), but excluding endorsements in
the ordinary course of business of negotiable instruments in
the course of collection; (i) Liabilities (for example,
repurchase agreements and sale/leaseback agreements)
consisting of an obligation to purchase or lease securities or
other property, if such Liabilities arises out of or in
connection with
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the sale of the same or similar securities or property;
(j) Liabilities with respect to letters of credit or
applications or reimbursement agreements therefor; (k)
Liabilities with respect to payments received in consideration
of oil, gas or other minerals yet to be acquired or produced
at the time of payment (including obligations under
"take-or-pay" contracts to deliver gas in return for payments
already received and the undischarged balance of any
production payment created by such Person or for the creation
of which such Person directly or indirectly received payment);
or (l) Liabilities with respect to other obligations to
deliver goods or services in consideration of advance payments
therefor; provided, however, that the "Obligations" of any
Person shall not include Liabilities that were incurred by
such Person on ordinary trade terms to vendors, suppliers, or
other Persons providing goods and services for use by such
Person in the ordinary course of its business, unless and
until such Liabilities are outstanding more than 120 days past
original invoice or billing date therefor.
"PETROQUEST OIL & GAS" shall mean PetroQuest Oil & Gas,
L.L.C., a Louisiana limited liability company the sole member
of which is the Guarantor.
"RESTRICTED PERSON" means the Guarantor, the Borrower, and
each other Subsidiary of the Guarantor.
"UNRESTRICTED SUBSIDIARY" means (a) any Subsidiary of
Guarantor designated an Unrestricted Subsidiary of Guarantor
by Guarantor's Board of Directors in compliance with the
following sentence, and (b) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors of Guarantor may at any
time and from time to time designate any Subsidiary of
Guarantor (other than Borrower or any Subsidiary of Borrower)
as an Unrestricted Subsidiary provided that (i) no Default or
Event of Default has occurred or is continuing at the time of
such designation and after giving effect to such designation,
(ii) immediately after such designation, no Restricted Person
has any Liability to pay any Obligations of such Subsidiary,
has in any way guaranteed any Obligations of such Subsidiary,
or has any assets or properties which are subject to any
Encumbrance securing any Obligations of such Subsidiary, and
(iii) notice of any such designation is promptly given to Bank
in writing.
B. AMENDMENT TO AFFIRMATIVE COVENANTS.
(1). The affirmative covenants contained in Sections 11.1.,
11.2., 11.3., 11.4., 11.5., 11.6., 11.7., 11.8., 11.9., 11.10., 11.11., 11.13.,
11.14., 11.16., and 11.22. shall apply to the Borrower and the Guarantor.
(2). The following new affirmative covenant is hereby added to
the Agreement as Section 11.21.:
SECTION 11.21. PETROQUEST OIL & GAS. The Guarantor shall cause
the assets of PetroQuest Oil & Gas at all times to consist
solely of beneficial interests in oil
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and gas properties, the legal interests of which is owned by
Persons other than the Borrower and/or the Guarantor. The
Guarantor further agrees to remain the sole member of
PetroQuest Oil & Gas.
(3). The following new affirmative covenant is hereby added to
the Agreement as Section 11.22.
SECTION 11.22. UNRESTRICTED SUBSIDIARIES Guarantor and
Borrower will insure that each Unrestricted Subsidiary
complies with each indenture, mortgage, deed of trust,
security agreement, lease, franchise, agreement, contract or
other instrument or obligation to which such Unrestricted
Subsidiary is a party or by which it or any of its properties
is bound, and with all laws, regulations, and orders
applicable to such Unrestricted Subsidiary or its properties,
business and affairs, including Environmental Laws, if such
Unrestricted Subsidiary's failure so to comply would impose
any Liability on any Restricted Person, require any Restricted
Person to pay or perform any Liability owing by any
Unrestricted Subsidiary, or could otherwise cause a Material
Adverse Change. The Guarantor and the Borrower will insure
that no Unrestricted Subsidiary takes, or omits to take, any
action if such action or omission would cause the Guarantor or
the Borrower to be unable to remake its representations and
warranties hereunder.
C. AMENDMENTS TO NEGATIVE COVENANTS.
(1). The negative covenants contained in Sections 12.1.,
12.2., 12.6., 12.7., 12.8., and 12.11. shall apply to both the Borrower and the
Guarantor.
(2). Section 12.4 (f) of the Agreement is hereby deleted.
(3). Section 12.5 (c) of the Agreement is hereby deleted.
(4). The following new negative covenant is hereby added to
the Agreement as Section 12.11.:
SECTION 12.11. NON-RECOURSE INDEBTEDNESS. The Borrower and the
Guarantor agree and covenant that no Unrestricted Subsidiary
shall create, incur, assume, or otherwise become liable with
respect to any Obligations other than Non-Recourse
Indebtedness and no Unrestricted Subsidiary shall have
Non-Recourse Indebtedness in excess of $25,000,000 at any one
time outstanding.
(5). Section 12.6 of the Agreement is hereby amended and
supplemented to include the following new provision as subpart (c) thereof:
(c) Loans by Borrower to Guarantor and loans by Guarantor to
Borrower and/or any Subsidiary of Guarantor that is a
guarantor of the Indebtedness, and capital contributions, and
investments in the Borrower or any Subsidiary of Guarantor
that is a guarantor of the Indebtedness.
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D. ASSUMPTION. Subject to the terms and conditions of the Agreement, as
amended by the First Amendment, the LLC does hereby unconditionally assume all
obligations, duties and responsibilities of the Borrower under the Agreement,
the Revolving Note, the Mortgage, the Loans, and all Related Documents to which
PE-LA. and/or PEO was a party. Further, as a result of the Merger, the LLC
hereby acknowledges and confirms that it is now the sole Borrower under the
Revolving Note.
E. CONFIRMATION OF COLLATERAL DOCUMENTS. It is the intention of the
parties that all of the liens, privileges, priorities, and equities existing and
to exist under and in accordance with the terms of the Loan Documents are hereby
renewed, extended, and carried forward as security for the Loans. Further, the
parties agree and acknowledge that the Guaranty shall continue to secure the
payment of the indebtedness of the LLC to the Bank, including the indebtedness
of the LLC under the Revolving Note. The LLC and the Guarantor agree to execute
and deliver to the Bank, promptly upon the request of the Bank or its counsel,
all supplements, amendments, and/or restatements to the Collateral Documents
that are deemed necessary by the Bank to evidence the Merger and/or the fact
that the LLC is the successor to PEO and PE-LA.
F. NO DEFAULT REPRESENTATION. On and as of the date hereof, and after
giving effect to this First Amendment, the LLC and the Guarantor reaffirm and
restate the representations and warranties set forth in the Agreement and the
Loan Documents. Further, the LLC and the Guarantor also represent and warrant
that as the date hereof and after giving effect to this First Amendment, no
uncured or unwaived Default has occurred and is continuing under the Agreement,
as amended by this First Amendment.
G. CONDITIONS PRECEDENT. The obligation of the Bank to make the Loans
remains subject to the conditions precedent set forth in the Agreement and the
following conditions precedent: The Bank's receipt of (i) this First Amendment
executed by the LLC and the Guarantor; (ii) certified resolutions by the
Guarantor (on behalf of itself and as the sole member of the LLC), in for and
substance satisfactory to the Bank; (iii) the executed documents evidencing the
Merger and the filing thereof with the Louisiana Secretary of State and in all
records necessary to effect a transfer of the Mortgaged Properties to the LLC;
and (iv) all amendments, supplements, and/or restatements pertaining to the
Collateral Documents that may be required by the Bank or its counsel as a result
of the Merger.
H. WAIVER OF DEFENSES. In consideration of the Bank's execution of this
First Amendment, the LLC and the Guarantor do hereby irrevocably waive any and
all claims and/or defenses to payment on any indebtedness owed by any of them to
the Bank that may exist as of the date of execution of this First Amendment.
I. AMENDMENTS. THE CREDIT AGREEMENT AND THIS FIRST AMENDMENT ARE CREDIT
OR CREDIT AGREEMENTS AS DESCRIBED IN LA. R.S. 6:SS.1121, ET SEQ. THERE ARE NO
ORAL AGREEMENTS BETWEEN THE BANK, THE LLC, AND THE GUARANTOR. THE CREDIT
AGREEMENT, AS AMENDED BY THIS FIRST AMENDMENT, SETS FORTH THE ENTIRE AGREEMENT
OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER
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HEREOF AND SUPERSEDES ALL PRIOR WRITTEN AND ORAL UNDERSTANDINGS BETWEEN THE
BANK, THE LLC, AND THE GUARANTOR WITH RESPECT TO THE MATTERS HEREIN SET FORTH.
THE CREDIT AGREEMENT, AS AMENDED BY THIS FIRST AMENDMENT, MAY NOT BE MODIFIED OR
AMENDED EXCEPT BY A WRITING SIGNED AND DELIVERED BY THE LLC, THE GUARANTOR AND
THE BANK.
J. GOVERNING LAW: COUNTERPARTS. This First Amendment shall be governed
by and construed in accordance with the laws of the State of Louisiana. This
First Amendment may be executed in any number of counterparts, all of which
counterparts, when taken together, shall constitute one and the same document.
K. CONTINUED EFFECT. Except as expressly modified herein, the Credit
Agreement as amended by this First Amendment, shall continue in full force and
effect. The Credit Agreement, as amended by this First Amendment, is hereby
ratified and confirmed by the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed and delivered as of the date hereinabove provided by the
authorized officers each hereunto duly authorized.
PETROQUEST ENERGY, L.L.C.
A LOUISIANA LIMITED LIABILITY COMPANY
BY PETROQUEST ENERGY, INC., A DELAWARE
CORPORATION, AS SOLE MEMBER
BY: /s/ XXXXXXX X. XXXXXXX
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NAME: Xxxxxxx X. Xxxxxxx
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TITLE: Chairman Of The Board &
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Chief Executive Officer
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PETROQUEST ENERGY, INC.
A DELAWARE CORPORATION
BY: /s/ XXXXXXX X. XXXXXXX
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NAME: Xxxxxxx X. Xxxxxxx
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TITLE: Chairman Of The Board &
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Chief Executive Officer
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HIBERNIA NATIONAL BANK
BY: /s/ XXXXX X. XXXX
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NAME: Xxxxx X. Xxxx
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TITLE: Senior Vice President
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