EXHIBIT 10.10
THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of March 1, 2002 (the "Third Amendment"), among PETROQUEST ENERGY, L.L.C., a
Louisiana limited liability company (the "Borrower"), PETROQUEST ENERGY, INC., a
Delaware corporation (the "Guarantor"), the LENDERS, and HIBERNIA NATIONAL BANK,
a national banking association, individually as a Lender and as Administrative
Agent.
R E C I T A L S:
1. The parties hereto are the parties to that certain Amended and Restated
Credit Agreement dated as of May 11, 2001, as amended by First Amendment thereto
dated as of July 20, 2001, and as amended by Second Amendment thereto dated as
of December 24, 2001 (as so amended, the "Agreement"), pursuant to which the
Lenders established in favor of the Borrower a revolving line of credit.
2. The purposes of this Third Amendment are (i) to evidence that the
Borrowing Base Amount is $28,000,000.00 as of March 1, 2002, and (ii) to
evidence certain other changes to the Agreement.
3. Capitalized terms used herein which are defined or used in the
Agreement are used herein with such meanings, except as may be otherwise
expressly provided in this Third 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. AMENDMENT TO DEFINITIONS.
1. The definition of the term "Borrowing Base Amount" in the Agreement is
hereby deleted and restated as follows:
"BORROWING BASE AMOUNT" shall mean at any time the valuation of the
Borrower's Mortgaged Properties, projected oil and gas prices,
underwriting factors, and any other factors deemed relevant by the
Required Lenders in their sole discretion, all as evaluated and
determined by the Required Lenders in their sole discretion on a
semi-annual basis on September 30 and March 31. In addition, the
Required Lenders, in their sole discretion, may conduct one
unscheduled Borrowing Base Amount redetermination subsequent to each
semi-annual redetermination, and the Borrower, at its option, may
request one (1) unscheduled Borrowing Base Amount
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redetermination after each scheduled semi-annual redetermination by
the Required Lenders. The Borrowing Base Amount also is subject to
mandatory Quarterly Reductions. The Required Lenders are not
obligated under any circumstances to establish the Borrowing Base
Amount based solely on oil and gas valuation data for the Mortgaged
Properties. The Borrowing Base Amount shall never exceed
$100,000,000.00.
2. The definition of the term "Eurodollar Margin" in the Agreement is
hereby deleted and restated as follows:
"EURODOLLAR MARGIN" shall mean, with respect to each Eurodollar
Loan:
(i) 2.375% per annum whenever the Borrowing Base Usage under the
Revolving Line of Credit is greater than or equal to 90%;
(ii) 2.000% per annum whenever the Borrowing Base Usage under the
Revolving Line of Credit is greater than or equal to 50% but less
than 90%; or
(iii) 1.625% per annum whenever the Borrowing Base Usage under the
Revolving Line of Credit is less than 50%.
3. The definition of the term "Quarterly Reduction" in the Agreement is
hereby deleted and restated as follows:
"QUARTERLY REDUCTION" shall mean each reduction to the Borrowing
Base Amount established by the Required Lenders based on each
scheduled and unscheduled redetermination of the Borrowing Base
Amount. The Quarterly Reduction will be made on January 31, April
30, July 31, and October 31 of each year. The Quarterly Reduction
will be $3,000,000.00 on each of April 30, 2002 and July 31, 2002,
unless redetermined by the Required Lenders. The Administrative
Agent will promptly notify the Borrower of any change in the
Quarterly Reduction as determined from time to time by the Required
Lenders.
4. The following new definitions are hereby added to the Agreement:
"BASE RATE MARGIN" shall mean, with respect to each Base Rate Loan:
(i) 0.375% per annum whenever the Borrowing Base Usage under the
Revolving Line of Credit is greater than or equal to 90%; or
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(ii) 0.000% per annum whenever the Borrowing Base Usage under the
Revolving Line of Credit is less than 90%.
"THIRD AMENDMENT" shall mean that certain Third Amendment to Amended
and Restated Credit Agreement dated as of March 1, 2002, among the
Borrower, the Guarantor, the Lenders, and the Administrative Agent.
B. BORROWING BASE AMOUNT REDETERMINATION. The Agreement is hereby amended
to reflect that the Borrowing Base Amount as of March 1, 2002, is
$28,000,000.00. The parties also acknowledge that the next regularly scheduled
semi-annual determination of the Borrowing Base Amount will take effect on March
31, 2002.
C. REVISION TO SECTION 6.2. Section 6.2 of the Agreement is hereby deleted
and restated as follows:
SECTION 6.2. UNUSED FEE. The Borrower shall pay the Administrative
Agent for the Pro Rata benefit of the Lenders an unused fee
calculated as follows: (i) if the Borrowing Base Usage is greater
than or equal to 90%, the unused fee is 0.50%; (ii) if the Borrowing
Base Usage is greater than or equal to 50% but less than 90%, the
unused fee is 0.50%; (iii) if the Borrowing Base Usage is less than
50%, the unused fee is 0.375%. The unused fee will be payable
quarterly in arrears, commencing June 30, 2001. The unused portion
of the Borrowing Base Amount shall be determined on a daily basis by
subtracting from the Borrowing Base Amount the amount of all
Revolving Loans outstanding, and by averaging said daily amounts for
the period for which the fee is to be determined. The Borrower
hereby authorizes the Administrative Agent to debit its account
maintained with the Administrative Agent for collection of the
unused fee.
D. REVISION TO AFFIRMATIVE COVENANTS.
1. Section 12.17 of the Agreement is hereby deleted and restated as
follows:
SECTION 12.17 CAPITAL BUDGET. Upon the Lenders' request, the
Guarantor agrees to provide the Lenders with a detailed capital
budget, in such detail as the Lenders may reasonably request.
2. Section 12.18 of the Agreement is hereby deleted and restated as
follows:
SECTION 12.18 FINANCIAL PROJECTIONS. Upon the Lenders' request, the
Guarantor agrees to provide the Lenders with detailed consolidated
financial projections, including a projected income statement,
balance sheet and statement of cash flow. The said financial
projections shall reflect all required reductions to the
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Borrowing Base Amount pursuant to this Agreement and the projected
payment of all capital expenditures (as detailed in the capital
budgets submitted pursuant to Section 12.17 above).
E. REVISION TO NEGATIVE COVENANTS. Section 13.12 (General and
Administrative Expenses) of the Agreement is hereby deleted in its entirety.
F. PARTIAL RELEASE OF THE MORTGAGED PROPERTIES. The Lenders hereby consent
to the Borrower's sale of its interests in the Valentine Field, Lafourche
Parish, Louisiana, which sale is to occur on March 1, 2002. The Administrative
Agent is instructed by the Lenders to execute a partial release of the Mortgage
whereby the Borrower's interests in the Valentine Field are released from the
Mortgage. To the extent Section 13.2 of the Agreement prohibits the sale of
Borrower's interests in the Valentine Field, the prohibition is waived by the
Lenders.
G. 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 Borrower to the Lenders, including the
indebtedness of the Borrower under the Revolving Notes.
H. NO DEFAULT REPRESENTATION. On and as of the date hereof, and after
giving effect to this Third Amendment, the Borrower and the Guarantor reaffirm
and restate the representations and warranties set forth in the Agreement and
the Loan Documents. Further, the Borrower and the Guarantor also represent and
warrant that as the date hereof and after giving effect to this Third Amendment,
no uncured or unwaived Default has occurred and is continuing under the
Agreement, as amended by this Third Amendment.
I. CONDITIONS PRECEDENT. The obligation of the Lenders 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 Third Amendment
executed by the Borrower and the Guarantor; (ii) certified resolutions by the
Guarantor (on behalf of itself and as the sole member of the Borrower), in form
and substance satisfactory to the Administrative Agent; and (iii) all
amendments, supplements, and/or restatements pertaining to the Collateral
Documents that may be required by the Administrative Agent or its counsel.
J. WAIVER OF DEFENSES. In consideration of the Lenders' execution of this
Third Amendment, the Borrower 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 Lenders and/or the Administrative Agent that may exist as of the
date of execution of this Third Amendment.
K. AMENDMENTS. THE AGREEMENT AND THIS THIRD AMENDMENT ARE CREDIT OR LOAN
AGREEMENTS AS DESCRIBED IN LA. R.S. 6:SS.1121, ET SEQ. THERE ARE NO ORAL
AGREEMENTS BETWEEN PARTIES TO THIS THIRD AMENDMENT. THE AGREEMENT, AS AMENDED BY
THIS THIRD AMENDMENT, SETS FORTH THE ENTIRE AGREEMENT OF THE PARTIES WITH
RESPECT TO
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THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR WRITTEN AND ORAL
UNDERSTANDINGS BETWEEN THE ADMINISTRATIVE AGENT, THE LENDERS, THE BORROWER, AND
THE GUARANTOR WITH RESPECT TO THE MATTERS HEREIN SET FORTH. THE AGREEMENT, AS
AMENDED BY THIS THIRD AMENDMENT, MAY NOT BE MODIFIED OR AMENDED EXCEPT BY A
WRITING SIGNED AND DELIVERED BY THE BORROWER, THE GUARANTOR, THE LENDERS, AND
THE ADMINISTRATIVE AGENT.
L. GOVERNING LAW: COUNTERPARTS. This Third Amendment shall be governed by
and construed in accordance with the laws of the State of Louisiana. This Third
Amendment may be executed in any number of counterparts, all of which
counterparts, when taken together, shall constitute one and the same document.
M. CONTINUED EFFECT. Except as expressly modified herein, the Agreement as
amended by this Third Amendment, shall continue in full force and effect. The
Agreement, as amended by this Third Amendment, is hereby ratified and confirmed
by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be executed and delivered as of the date hereinabove provided by the authorized
officers each hereunto duly authorized.
BORROWER:
PETROQUEST ENERGY, L.L.C.
A LOUISIANA LIMITED LIABILITY COMPANY
BY PETROQUEST ENERGY, INC., A DELAWARE
CORPORATION, AS SOLE MEMBER
BY: /s/ XXXXXXX X. XXXXXXXX
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NAME: XXXXXXX X. XXXXXXXX
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TITLE: SR. V.P. & CFO
---------------------------------
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GUARANTOR:
PETROQUEST ENERGY, INC.
A DELAWARE CORPORATION
BY: /s/ XXXXXXX X. XXXXXXXX
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NAME: XXXXXXX X. XXXXXXXX
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TITLE: SR. V.P. & CFO
---------------------------------
AGENT:
HIBERNIA NATIONAL BANK, AS
ADMINISTRATIVE AGENT
BY: /s/ XXXXX X. XXXX
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NAME: XXXXX X. XXXX
TITLE: SENIOR VICE PRESIDENT
LENDERS:
ROYAL BANK OF CANADA
BY: /s/ XXX X. XXXXXXXXXX
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NAME: XXX X. XXXXXXXXXX
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TITLE: SENIOR MANAGER
---------------------------------
UNION BANK OF CALIFORNIA, N.A.
BY: /s/ XXXX XXXXXXXXXX
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NAME: XXXX XXXXXXXXXX
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TITLE: VICE PRESIDENT
---------------------------------
HIBERNIA NATIONAL BANK
BY: /S/ XXXXX X. XXXX
------------------------------------
NAME: XXXXX X. XXXX
TITLE: SENIOR VICE PRESIDENT
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