AMENDMENT NO. 5 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.1
THIS AMENDMENT NO. 5 to the SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the “Amendment”),
dated to be effective as of April 1, 2008, is 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 $95,000,000, as reduced by Section
2.2.5.”
(b) Section 2.3, Termination, of the Credit Agreement is hereby amended in its
entirety to read as follows:
“2.3 Termination. The Aggregate Outstanding Credit Exposure and all other
unpaid Obligations shall be paid in full by the Borrower on the Facility Termination
Date; provided however, that Lender Rate Management Obligations arising under Rate
Management Contracts entered into prior to the Facility Termination Date may exist
and extend beyond such Facility Termination Date in accordance with the terms
thereof, provided such contracts shall not be for greater than twelve (12) months,
and in each case, upon the written agreement of the Agent, the Borrower and Lender
(or Affiliate thereof) party to each such Rate Management Contract certifying that
such Lender Rate Management Obligations are and remain, to the satisfaction of
Agent, fully secured by the applicable Collateral Documents.”
(c) Clause (i) of Section 6.23, Rate Management Transactions, of the Credit Agreement
is hereby amended by deleting such clause in its entirety and substituting the following:
“(i) contracts entered into with the purpose of fixing prices on oil or gas
expected to be produced by the Borrower or its Subsidiaries, provided that at all
times: (a) no such contract fixes a price for a term of more than thirty-six (36)
months; (b) the aggregate notional quantities of oil or gas covered by all such
contracts for any month (determined, in the case of contracts that are not settled
on a monthly basis, by a monthly pro-ration acceptable to the Agent) does not exceed
(x) with respect to contracts fixing prices on oil (I) if such month is within
twelve (12) months of the time of determination, 100% of the Projected Oil
Production for such month, and (II) if such month is more than twelve (12) months
after the time of determination, 85% of the Projected Oil Production, (y) with
respect to contracts fixing prices on gas, (I) if such month is within twelve (12)
months of the time of determination, 100% of the Projected Gas Production for such
month, and (II) if such month is more than twelve (12) months after the time of
determination, 85% of the Projected Gas Production, and (z) with respect to
contracts fixing prices on natural gas liquids (I) if such month is within twelve
(12) months of the time of determination, 100% of the Projected Natural Gas Liquids
Production for such month, and (II) if such month is more than twelve (12) months
after the time of determination, 85% of the Projected Natural Gas Liquids
Production; and (c) each such contract is with a counterparty or has a guarantor of
the obligation of the counterparty who (unless such counterparty is a Lender or one
of its Affiliates) at the time such contract is made has (or whose holding company
has) long-term obligations rated BBB or better by S&P or Baa2 or better by Xxxxx’x
or is an investment grade-rated industry participant. As used in this subsection,
the term “Projected Oil Production”, “Projected Gas Production” and “Projected
Natural Gas Liquids Production” means, in the case of each such commodity, the
projected production of oil, gas or natural gas liquids, as the case may be
(measured by volume unit, BTU equivalent or gallons, as applicable, not sales price)
for the term of the contracts or a particular month, as applicable, from Oil and Gas
Properties and interests owned by the Parent, the Borrower and their Subsidiaries
which are located in or offshore of the United
States of America and which have attributable to them PDP Reserves, as such
production is determined by the Agent using the most recent Reserve Report delivered
pursuant to Section 6.1, after deducting projected production from any properties or
interests sold or under contract for sale that had been included in such report and
after adding projected production from any properties or interests that had not been
reflected as PDP Reserves in such report but that are reflected in a separate or
supplemental reports meeting the requirements of Section 6.1 above and otherwise are
satisfactory to the Agent (including any production that is newly classified in such
separate or supplemental report as PDP Reserves which was previously reflected as
some other category of Reserves); and”.
3. 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 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.
4. Representations and Warranties of Borrower. Each of Parent and 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 or such other
corporate governing documents 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.
5. 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 such 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 Agent or any Lender under any of the Security
Instruments, nor constitute a waiver of any provision of any of the Security Instruments.
6. 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 Agent and
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.
7. 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.
8. 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.
9. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of Texas.
10. 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 22nd
day of April, 2008.
| “Borrower” PETROQUEST ENERGY, L.L.C. By: PetroQuest Energy Inc., its sole member |
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| By: | /s/ W. Xxxx Xxxxxxx | |||
| W. Xxxx Xxxxxxx | ||||
| Executive Vice President and
Chief Financial Officer |
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| “Guarantors” PETROQUEST ENERGY, INC. |
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| By: | /s/ W. Xxxx Xxxxxxx | |||
| W. Xxxx Xxxxxxx | ||||
| Executive Vice President and
Chief Financial Officer |
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| PITTRANS, INC. |
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| By: | /s/ W. Xxxx Xxxxxxx | |||
| W. Xxxx Xxxxxxx | ||||
| Executive Vice President and
Chief Financial Officer |
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| TDC ENERGY, LLC |
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| By: | /s/ W. Xxxx Xxxxxxx | |||
| W. Xxxx Xxxxxxx | ||||
| Executive Vice President and
Chief Financial Officer |
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| “Lenders” JPMORGAN CHASE BANK, N.A., As the Agent, a Lender and LC Issuer |
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| By: | /s/ Jo Xxxxx Xxxxxxxxx | |||
| Jo Xxxxx Xxxxxxxxx, Vice President | ||||
| CALYON NEW YORK BRANCH, As a Lender and as Syndication Agent |
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| By: | /s/ Xxx Xxxxxxxx | |||
| Name: | Xxx Xxxxxxxx | |||
| Title: | Managing Director | |||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Director | |||
| MACQUARIE BANK LIMITED, As a Lender |
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| By: | /s/Xxxxxx Xxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | Division Director | |||
| By: | /s/ Xxxxx Xxxx | |||
| Name: | Xxxxx Xxxx | |||
| Title: | Attorney | |||
