Exhibit 10.1
 
 
FIRST AMENDMENT TO
CREDIT AGREEMENT
dated as of
March 24, 2009
among
PETROQUEST ENERGY, INC.,
as Parent,
PETROQUEST ENERGY, L.L.C.,
as Borrower,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
and
The Lenders Party Hereto
____________________________
CALYON NEW YORK BRANCH,
as Syndication Agent,
and
BANK OF AMERICA, N.A.,
as Documentation Agent
____________________________
J.P. MORGAN SECURITIES INC. and CALYON NEW YORK BRANCH
Co-Lead Arrangers

 

 

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FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”) dated as of
March 24, 2009, is among PETROQUEST ENERGY, INC., a Delaware corporation, as the
Parent, PETROQUEST ENERGY, L.L.C., a Louisiana limited liability company, as the
Borrower, JPMORGAN CHASE BANK, N.A., as Administrative Agent, CALYON NEW YORK
BRANCH, as Syndication Agent, and BANK OF AMERICA, N.A., as Documentation Agent,
and the Lenders party hereto.
R E C I T A L S
A. The Borrower, the Administrative Agent and the Lenders are parties to that
certain Credit Agreement dated as of October 2, 2008 (the “Credit Agreement”),
pursuant to which the Lenders have made certain loans to and extensions of
credit for the account of the Borrower.
B. The Borrower has requested and the Lenders have agreed to amend certain
provisions of the Credit Agreement in order to clarify certain provisions
contained therein.
C. NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms. Each capitalized term used herein but not otherwise
defined herein has the meaning given such term in the Credit Agreement. Unless
otherwise indicated, all article and section references in this First Amendment
refer to articles and sections of the Credit Agreement.
Section 2. Amendments to Credit Agreement.
2.1 Amendments to Section 1.02.
(a) The definition of “Agreement” is hereby deleted and replaced in its entirety
to read as follows:
“Agreement” means this Credit Agreement, as further amended by the First
Amendment, as the same may from time to time be amended, modified, supplemented
or restated.
(b) The definition of “Alternate Base Rate” is hereby deleted and replaced in
its entirety to read as follows:
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate having
an Interest Period with a one month duration on such day (or if such day is not
a Business Day, the immediately preceding Business Day) plus 1%, provided that,

 

 

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for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on
the rate (rounded upwards, if necessary, to the next 1/100 of 1%) at which
dollar deposits of $5,000,000 with a one month maturity are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
on such day (or the immediately preceding Business Days if such day is not a day
on which banks are open for dealings in dollar deposits in the London interbank
market). Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.
(c) The definition of “Applicable Margin” is hereby amended in its entirety to
read as follows:
“Applicable Margin” means, for any day, with respect to any Loan or with respect
to the Commitment Fee Rate, the applicable rate per annum set forth in the
Borrowing Base Utilization Grid below based on the Borrowing Base Utilization
Percentage then in effect on such day:

                                         
Borrowing Base Utilization Percentage
    <25 %     >25% <50 %     >50% <75 %     >75% <90 %     >90 %
Eurodollar Loans
    2.500 %     2.750 %     3.000 %     3.250 %     3.500 %
ABR Loans
    1.625 %     1.875 %     2.125 %     2.375 %     2.625 %
Commitment Fee Rate
    0.500 %     0.500 %     0.500 %     0.500 %     0.500 %

Each change in the Applicable Margin and the Commitment Fee Rate shall apply
during the period commencing on the effective date of such change in the
Borrowing Base Utilization Percentage and ending on the date immediately
preceding the effective date of the next such change; provided, however, that if
at any time the Borrower fails to deliver a Reserve Report pursuant to
Section 8.12(a), then the “Applicable Margin” and “Commitment Fee Rate” each
shall mean the rate per annum set forth on the grid when the Borrowing Base
Utilization Percentage is at its highest level
(d) The definition of “Defaulting Lender” is hereby amended in its entirety to
read as follows:
“Defaulting Lender” means any Lender that has (a) failed to fund any portion of
its Loans or participations in Letters of Credit within three (3) Business Days
of the date required to be funded by it hereunder, (b) notified the Borrower,
the Administrative Agent, the Issuing Bank or any Lender in writing that it does
not intend to comply with any of its funding obligations under this Agreement or
has made a public statement to the effect that it does not intend to comply with
its funding obligations under this Agreement or under other agreements in which
it

 

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commits to extend credit, (c) failed, within three (3) Business Days after
request by the Administrative Agent, to confirm that it will comply with the
terms of this Agreement relating to its obligations to fund prospective Loans
and participations in then outstanding Letters of Credit, (d) otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within three (3) Business Days of the date
when due, unless the subject of a good faith dispute, or (e) (i) become or is
insolvent or has a parent company that has become or is insolvent or (ii) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment.
“First Amendment” means the First Amendment to Credit Agreement dated as of
March 24, 2009 among the Parent, the Borrower, the Administrative Agent, the
Syndication Agent, the Documentation Agent and the Lenders party thereto.
2.2 Amendment to Section 2.08. The following Subsection (k) shall be added to
the end of Section 2.08:
(k) Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:
(i) if any LC Exposure exists at the time a Lender is a Defaulting Lender, the
Borrower shall, within five (5) Business Days following notice by the
Administrative Agent, cash collateralize such Defaulting Lender’s LC Exposure in
accordance with the procedures set forth in Section 2.08(j) for so long as such
LC Exposure is outstanding; and
(ii) the Issuing Bank shall not be required to issue, amend or increase any
Letter of Credit unless it is satisfied that cash collateral will be provided by
the Borrower in accordance with Section 2.08(k)(i).
2.3 Liquidity Requirement. Section 8.18 is hereby added which reads as follows:
Section 8.18. Liquidity Requirement. The Borrower shall at all times maintain
Liquidity of not less than $10,000,000. For purposes of this Section 8.18,
“Liquidity” means the sum of (i) cash, (ii) Investments of the type described in
Section 9.05(c), (d), (e) and (f) and (iii) unused availability under this
Agreement.

 

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2.4 Redetermination of Borrowing Base. For the period from and including
March 24, 2009 to but excluding the first Redetermination Date, the amount of
the Borrowing Base shall be $130,000,000. Notwithstanding the foregoing, the
Borrowing Base may be subject to further adjustments from time to time pursuant
to Section 8.13(c), Section 8.16 and Section 9.12(d).
Section 3. Waivers.
3.1 Pursuant to Section 8.12(a), the Borrower was required to deliver a Reserve
Report on or before March 1, 2009 and on or before the delivery of such Reserve
Report, the Borrower was also required to deliver (i) a certificate from a
Responsible Officer pursuant to Section 8.12(c) and (ii) title information
pursuant to Section 8.13(a). The Borrower was not timely in delivery of the
required March 1, 2009 Reserve Report or the related certificate and title
information, in violation of Section 8.12(a), Section 8.12(c) and
Section 8.13(a) (the “Designated Defaults”). Therefore, the Borrower hereby
requests, and the Administrative Agent and the Lenders hereby agree to waive the
Designated Defaults. Except as expressly waived herein, all covenants,
obligations and agreements of the Borrower contained in the Credit Agreement and
the other Loan Documents shall remain in full force and effect in accordance
with their terms.
3.2 Neither the execution by the Administrative Agent or the Lenders of this
First Amendment, nor any other act or omission by the Administrative Agent or
the Lenders or their officers in connection herewith, shall be deemed a waiver
by the Administrative Agent or the Lenders of any other defaults which may
exist, which may have occurred prior to the Designated Defaults or which may
occur in the future under the Credit Agreement and/or the other Loan Documents,
or any future defaults of the same provision waived hereunder (collectively
“Other Violations”). Similarly, nothing contained in this First Amendment shall
directly or indirectly in any way whatsoever either: (i) impair, prejudice or
otherwise adversely affect the Administrative Agent’s or the Lenders’ right at
any time to exercise any right, privilege or remedy in connection with the Loan
Documents with respect to any Other Violations, (ii) amend or alter any
provision of the Credit Agreement, the other Loan Documents, or any other
contract or instrument, or (iii) constitute any course of dealing or other basis
for altering any obligation of the Borrower or any right, privilege or remedy of
the Administrative Agent or the Lenders under the Credit Agreement, the other
Loan Documents, or any other contract or instrument. Nothing in this First
Amendment shall be construed to be a consent by the Administrative Agent or the
Lenders to any Other Violations.
Section 4. Conditions Precedent. This First Amendment shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 12.02 of the Credit Agreement) (the “First Amendment
Effective Date”):
4.1 The Administrative Agent shall have received from the Required Lenders, the
Borrower and each Guarantor, counterparts (in such number as may be requested by
the Administrative Agent) of this First Amendment signed on behalf of such
Persons.

 

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4.2 The Administrative Agent shall have received such other documents as the
Administrative Agent or special counsel to the Administrative Agent may
reasonably request.
4.3 No Default or Event of Default shall have occurred and be continuing, after
giving effect to the terms of this First Amendment.
The Administrative Agent is hereby authorized and directed to declare this First
Amendment to be effective when it has received documents confirming or
certifying, to the satisfaction of the Administrative Agent, compliance with the
conditions set forth in this Section 4 or the waiver of such conditions as
permitted hereby. Such declaration shall be final, conclusive and binding upon
all parties to the Credit Agreement for all purposes. Notwithstanding the
foregoing, this First Amendment shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 12.02 of the
Credit Agreement) at or prior to 1:00 p.m., New York time, on March 25, 2009.
Section 5. Miscellaneous.
5.1 Confirmation. The provisions of the Credit Agreement, as amended by this
First Amendment, shall remain in full force and effect following the
effectiveness of this First Amendment.
5.2 Ratification and Affirmation; Representations and Warranties. Each of the
Borrower and each Guarantor hereby (a) ratifies and affirms its respective
obligations under, and acknowledges, renews and extends its respective continued
liability under, each Loan Document to which it is a party and agrees that each
Loan Document to which it is a party remains in full force and effect, except as
expressly amended hereby, notwithstanding the amendments contained herein and
(b) represents and warrants to the Lenders that, as of the date hereof, after
giving effect to the terms of this First Amendment: (i) all of the
representations and warranties contained in each Loan Document to which it is a
party are true and correct, except to the extent any such representations and
warranties are expressly limited to an earlier date, in which case, such
representations and warranties shall continue to be true and correct as of such
specified earlier date, (ii) no Default has occurred and is continuing, (iii) no
Material Adverse Effect shall have occurred and (iv) attached hereto as Annex A
is a true and complete list of all Swap Agreements of the Parent, each
Subsidiary and the Partnerships entered into between the Effective Date and the
First Amendment Effective Date, the material terms thereof (including the type,
term, effective date, termination date and notional amounts or volumes), the net
mark to market value thereof, all credit support agreements relating thereto
(including any margin required or supplied) and the counterparty to each such
agreement.
5.3 Loan Document. This First Amendment is a “Loan Document” as defined and
described in the Credit Agreement and all of the terms and provisions of the
Credit Agreement relating to Loan Documents shall apply hereto.
5.4 Counterparts. This First Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of this First Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.

 

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5.5 NO ORAL AGREEMENT. THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS AND ANY SEPARATE LETTER AGREEMENTS WITH RESPECT TO FEES PAYABLE
TO THE ADMINISTRATIVE AGENT CONSTITUTE THE ENTIRE CONTRACT AMONG THE PARTIES
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL
PREVIOUS AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND
THERETO 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.
5.6 GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
5.7 Payment of Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and expenses incurred in
connection with this First Amendment, any other documents prepared in connection
herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
5.8 Severability. Any provision of this First Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
5.9 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and its respective successors and assigns.
[SIGNATURES BEGIN NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly executed as of the date first written above.

          BORROWER:  PETROQUEST ENERGY, L.L.C.
      By:   /s/ W. Todd Zehnder         Name:   W. Todd Zehnder        Title:  
Executive Vice President,
Chief Financial Officer and Treasurer      PARENT:  PETROQUEST ENERGY, INC.
      By:   /s/ W. Todd Zehnder         Name:   W. Todd Zehnder        Title:  
Executive Vice President,
Chief Financial Officer and Treasurer      GUARANTOR:  TDC ENERGY, LLC
      By:   /s/ W. Todd Zehnder         Name:   W. Todd Zehnder        Title:  
Executive Vice President,
Chief Financial Officer and Treasurer     

[Signature Page to First Amendment]

 

 

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          ADMINISTRATIVE AGENT:
AND LENDER  JPMORGAN CHASE BANK, N.A.
individually and as Administrative Agent and
Issuing Bank
      By:   /s/ Jo Linda Papadakis         Name:   Jo Linda Papadakis       
Title:   Vice President     

[Signature Page to First Amendment]

 

 

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          SYNDICATION AGENT:
AND LENDER  CALYON NEW YORK BRANCH
      By:   /s/ Tom Byargeon         Name:   Tom Byargeon        Title:  
Managing Director              By:   /s/ Michael D. Willis         Name:  
Michael D. Willis        Title:   Director     

[Signature Page to First Amendment]

 

 

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          DOCUMENTATION AGENT:
AND LENDER  BANK OF AMERICA, N.A.
      By:   /s/ Jeffrey H. Rathkamp         Name:   Jeffrey H. Rathkamp       
Title:   Managing Director     

[Signature Page to First Amendment]

 

 

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          LENDER:  WELLS FARGO BANK, N.A.
      By:   /s/ Scott Hodges         Name:   Scott Hodges        Title:   Vice
President     

[Signature Page to First Amendment]

 

 

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          LENDER:  WHITNEY NATIONAL BANK
      By:   /s/ William Jochetz         Name:   William Jochetz        Title:  
Officer     

[Signature Page to First Amendment]