AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT
NO. 2
TO
SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
THIS
AMENDMENT NO. 2 to the SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the
"Amendment")
is
dated November 16, 2006, 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. The defined terms "Consolidated
Current Assets" and "Consolidated Current Liabilities" set forth in Article
I of
the Credit Agreement are hereby deleted in their entirety and replaced with
the
following:
"Consolidated
Current Assets"
shall
mean the total of the consolidated current assets of the Parent, Borrower
and
their Subsidiaries, including amounts available under the Available
Borrowing Base;
provided,
however,
in
determining Consolidated
Current Assets,
such
determination shall not include non-cash gains, losses or charges required
(a)
under
SFAS 133, (b)
under
SFAS 143 or (c)
under
SFAS 123(R).
"Consolidated
Current Liabilities" shall mean the total of the consolidated current
liabilities of the Parent,
Borrower and their Subsidiaries, provided, however, in determining consolidated
current liabilities,
such
determination shall not include non-cash gains, losses or charges required
(a)
under
SFAS 133, (b)
under
SFAS 143 or (c)
under
SFAS 123(R).
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 $75,000,000, as reduced by Section
2.2.5."
(b) Section
6.1, Financial
Reporting,
of the
Credit Agreement is hereby amended by deleting (i) and (ii) thereof in their
entirety and replacing them with the following:
"
(i) within
ninety (90) days after the close of each of its fiscal years, unqualified
audited financial statements prepared by independent certified public
accountants acceptable to the Lenders,
prepared in accordance with Agreement
Accounting Principles on
a
consolidated basis for itself and its subsidiaries, including balance sheets
as
of the end of such period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by any management letter
prepared by said accountant in connection with the annual audited financial
statements;
(ii) within
forty-five (45) days after the close of the first three quarterly periods of
each of its fiscal years, for itself and its Subsidiaries,
consolidated unaudited balance sheets as at the close of each such period and
consolidated profit and loss and reconciliation of surplus statements and a
statement of cash flows for the period from the beginning of such fiscal year
to
the end of such quarter, all certified by its chief financial
officer;
"
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) There
shall not have been, in the sole judgment of Lenders, any material adverse
change in the financial condition, business or operations of Borrower or any
Guarantor;
(e) Payment
of all fees required to be paid to the Lenders in connection with this
Amendment;
(f) 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
(g) 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.
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.
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 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.
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 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 day and year first above written.
"Borrower"
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PETROQUEST
ENERGY, L.L.C.
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By:
|
PetroQuest
Energy Inc., its sole member
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By:
|
/s/
Xxxxxxx X. Xxxxxxxx
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||
Xxxxxxx
X. Xxxxxxxx
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Chief
Financial Officer
|
"Guarantors"
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PETROQUEST
ENERGY, INC.
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By:
|
/s/
Xxxxxxx X. Xxxxxxxx
|
||
Xxxxxxx
X. Xxxxxxxx
|
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Chief
Financial Officer
|
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PITTRANS,
INC.
|
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By:
|
/s/
Xxxxxxx X. Xxxxxxxx
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||
Xxxxxxx
X. Xxxxxxxx, Chief Financial Officer
|
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TDC
ENERGY, LLC
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By:
|
/s/
Xxxxxxx X. Xxxxxxxx
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||
Xxxxxxx
X. Xxxxxxxx
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Chief
Financial Officer
|
"Lenders"
|
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JPMORGAN
CHASE BANK, N.A.,
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As
the Agent, a Lender and LC Issuer
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By:
|
/s/
Jo Xxxxx Xxxxxxxxx
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Jo
Xxxxx Xxxxxxxxx, Vice President
|
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/s/
Xxxxxxx Xxxxxxx
|
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By:
|
/s/
Xxxxxxx X. Xxxxxx
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||
MACQUARIE
BANK LIMITED,
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/s/
Xxxxxxxx Xxxxxxx
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/s/
Xxxxxx Xxxxxxxx
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