Exhibit 10.1
Execution Version
FOURTH AMENDMENT TO
CREDIT AGREEMENT
dated as of
October 3, 2011
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
WELLS FARGO BANK, N.A.,
as Syndication Agent,
and
CAPITAL ONE, N.A.,
as Documentation Agent
J.P. MORGAN SECURITIES LLC,
as Lead Arranger

 

 

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FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”) dated as of
October 3, 2011, 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, and the
Lenders party hereto.
R E C I T A L S
WHEREAS, the Parent, the Borrower, the Administrative Agent and the Lenders are
parties to that certain Credit Agreement dated as of October 2, 2008, as amended
by that certain First Amendment to Credit Agreement dated as of March 24, 2009,
that certain Second Amendment to Credit Agreement dated as of September 30, 2009
and that certain Third Amendment to Credit Agreement dated as of August 5, 2010
(as amended, the “Credit Agreement”), pursuant to which the Lenders have made
certain loans to and extensions of credit for the account of the Borrower; and
WHEREAS, the Parent, the Borrower and the Administrative Agent have requested
that Capital One, N.A. and Iberiabank (each a “New Lender” and collectively, the
“New Lenders”) become Lenders under the Credit Agreement with a Maximum Credit
Amount in the amount as shown for the New Lender on Annex I to the Credit
Agreement (as amended hereby); and
WHEREAS, the Borrower has requested that the scheduled maturity date be extended
and that certain other provisions of the Credit Agreement be amended, in each
case as provided herein.
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 Fourth 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 amended and restated as follows:
“Agreement” means this Credit Agreement, as amended by the First Amendment, the
Second Amendment, the Third Amendment, and the Fourth Amendment, as the same may
from time to time be further amended, modified, supplemented or restated.

 

 

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(b) The definition of “Applicable Margin” is hereby amended and restated 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 Total
Commitments Utilization Grid below based on the Total Commitments Utilization
Percentage then in effect on such day:

                                          Total Commitments                    
          Utilization Percentage   <25%     ³25% <50%     ³50% <75%     ³75%
<90%     ³90%  
Eurodollar Loans
    1.500 %     1.750 %     2.000 %     2.250 %     2.500 %
ABR Loans
    0.500 %     0.750 %     1.000 %     1.250 %     1.500 %
Commitment Fee Rate
    0.375 %     0.375 %     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 Total
Commitments 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 Total Commitments Utilization
Percentage is at its highest level until such time as such Reserve Report is
delivered, at which time the “Applicable Margin” and “Commitment Fee Rate” each
shall revert to the applicable rate per annum set forth in the Total Commitments
Utilization Grid above.
(c) The definition of “Lenders” is hereby amended and restated as follows:
“Lenders” means the Persons listed on Annex I and any Person that shall have
become a party hereto pursuant to an Assignment and Assumption, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption, and any Person that shall have become a party hereto as an
Additional Lender pursuant to Section 2.06(c).
(d) The definition of “Maturity Date” is hereby amended and restated as follows:
“Maturity Date” means October 3, 2016.
(e) The definition of “Maximum Credit Amount” is hereby amended and restated as
follows:
“Maximum Credit Amount” means, as to each Lender, the amount set forth opposite
such Lender’s name on Annex I under the caption “Maximum Credit Amounts”, as the
same may be (a) reduced or terminated from time to time in connection with a
reduction or termination of the Aggregate Maximum Credit Amounts pursuant to
Section 2.06(b), (b) increased from time to time pursuant to Section 2.06(c) or
(c) modified from time to time pursuant to any assignment permitted by
Section 12.04(b).

 

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(f) The definition of “Additional Lender” is hereby added where alphabetically
appropriate to read as follows:
“Additional Lender” has the meaning assigned to such term in Section 2.06(c)(i).
(g) The definition of “Additional Lender Certificate” is hereby added where
alphabetically appropriate to read as follows:
“Additional Lender Certificate” has the meaning assigned to such term in
Section 2.06(c)(ii)(F) .
(h) The definition of “Fourth Amendment” is hereby added where alphabetically
appropriate to read as follows:
“Fourth Amendment” means the Fourth Amendment to Credit Agreement dated as of
October 3, 2011 among the Parent, the Borrower, the Administrative Agent, and
the Lenders party thereto.
(i) The definition of “Liquidity” is hereby added where alphabetically
appropriate to read as follows:
“Liquidity” means, as of any date of determination, the sum of (a) the amount
that (i) the total Commitments of the Lenders exceeds (ii) the total Revolving
Credit Exposure of the Lenders as of such date (but only to the extent that the
Borrower is permitted to borrow such amounts under the terms of this Agreement
including, without limitation, Section 6.02 hereof) plus (b) the amount of all
unrestricted and unencumbered cash and Investments of the type described in
Section 9.05(c), (d), (e), and (f) reflected on the Borrower’s balance sheet as
of such date.
(j) The definition of “Majority Lenders” is hereby added where alphabetically
appropriate to read as follows:
“Majority Lenders” means, at any time while no Loans or LC Exposure is
outstanding, Lenders having greater than fifty percent (50%) of the Aggregate
Maximum Credit Amounts; and at any time while any Loans or LC Exposure is
outstanding, Lenders holding greater than fifty percent (50%) of the outstanding
aggregate principal amount of the Loans and participation interests in Letters
of Credit (without regard to any sale by a Lender of a participation in any Loan
under Section 12.04(c)); provided that the Maximum Credit Amounts and the
principal amount of the Loans and participation interests in Letters of Credit
of the Defaulting Lenders shall be excluded from the determination of Majority
Lenders.

 

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(k) The definition of “Maximum Credit Amount Increase Certificate” is hereby
added where alphabetically appropriate to read as follows:
“Maximum Credit Amount Increase Certificate” has the meaning assigned to such
term in Section 2.06(c)(ii)(E).
(l) The definition of “Total Commitments Utilization Percentage” is hereby added
where alphabetically appropriate to read as follows:
“Total Commitments Utilization Percentage” means, as of any day, the fraction
expressed as a percentage, the numerator of which is the sum of the Revolving
Credit Exposures of the Lenders on such day, and the denominator of which is the
total Commitments in effect on such day.
(m) The definition of “Borrowing Base Utilization Percentage” is hereby deleted
from the Credit Agreement.
2.2 Changes from “Required Lenders” Threshold to “Majority Lenders” Threshold.
Sections 1.05, 2.08(j), 3.03(b), 10.02, 11.03 of the Credit Agreement, and
clause (a) of Exhibit D to the Credit Agreement, are each hereby amended by
deleting each reference to “Required Lenders” contained in each such Section or
clause and inserting in lieu thereof in each instance a reference to “Majority
Lenders”.
2.3 Amendment to Section 2.02(d). The first sentence of Section 2.02(d) of the
Credit Agreement is hereby amended and restated as follows:
The Loans made by each Lender shall be evidenced by a single promissory note of
the Borrower in substantially the form of Exhibit A, dated, in the case of
(i) any Lender party hereto as of the date of this Agreement, as of the date of
this Agreement, (ii) any Lender that becomes a party hereto pursuant to an
Assignment and Assumption, as of the effective date of the Assignment and
Assumption or (iii) any Lender that becomes a party hereto in connection with an
increase in the Aggregate Maximum Credit Amounts pursuant to Section 2.06(c), as
of the effective date of such increase, payable to the order of such Lender in a
principal amount equal to its Maximum Credit Amount as in effect on such date,
and otherwise duly completed.
2.4 Amendment to Section 2.06(b)(ii). The fourth sentence of Section 2.06(b)(ii)
of the Credit Agreement is hereby amended and restated as follows:
Any termination or reduction of the Aggregate Maximum Credit Amounts shall be
permanent and may not be reinstated except pursuant to Section 2.06(c).

 

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2.5 New Section Regarding Optional Increase in Aggregate Maximum Credit Amounts.
A new Section 2.06(c) is hereby added to the Credit Agreement immediately
following Section 2.06(b) and shall read in full as follows:
(c) Optional Increase in Aggregate Maximum Credit Amounts.
(i) Subject to the conditions set forth in Section 2.06(c)(ii), the Borrower may
increase the Aggregate Maximum Credit Amounts then in effect with the prior
written consent of the Administrative Agent by increasing the Maximum Credit
Amount of a Lender or by causing a Person that at such time is not a Lender to
become a Lender (an “Additional Lender”).
(ii) Any increase in the Aggregate Maximum Credit Amounts shall be subject to
the following additional conditions:
(A) such increase shall not be less than $5,000,000 unless the Administrative
Agent otherwise consents, and no such increase shall be permitted if after
giving effect thereto the Aggregate Maximum Credit Amounts would exceed
$300,000,000;
(B) no Default shall have occurred and be continuing at the effective date of
such increase;
(C) on the effective date of such increase, no Eurodollar Borrowings shall be
outstanding or if any Eurodollar Borrowings are outstanding, then the effective
date of such increase shall be the last day of the Interest Period in respect of
such Eurodollar Borrowings unless the Borrower pays compensation required by
Section 5.02;
(D) no Lender’s Maximum Credit Amount may be increased without the consent of
such Lender;
(E) if the Borrower elects to increase the Aggregate Maximum Credit Amounts by
increasing the Maximum Credit Amount of a Lender, the Borrower and such Lender
shall execute and deliver to the Administrative Agent a certificate
substantially in the form of Exhibit H-1 (a “Maximum Credit Amount Increase
Certificate”), together with a processing and recordation fee of $3,500, and the
Borrower shall deliver a new Note payable to the order of such Lender in a
principal amount equal to its Maximum Credit Amount after giving effect to such
increase, and otherwise duly completed; and
(F) If the Borrower elects to increase the Aggregate Maximum Credit Amounts by
causing an Additional Lender to become a party to this Agreement, then the
Borrower and such Additional Lender shall execute and deliver to the
Administrative Agent a certificate substantially in the form of Exhibit H-2 (an
“Additional Lender Certificate”), together with an Administrative Questionnaire
and a processing and recordation fee of $3,500, and the Borrower shall deliver a
Note payable to the order of such Additional Lender in a principal amount equal
to its Maximum Credit Amount, and otherwise duly completed.

 

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(iii) Subject to acceptance and recording thereof pursuant to Section
2.06(c)(iv), from and after the effective date specified in the Maximum Credit
Amount Increase Certificate or the Additional Lender Certificate (or if any
Eurodollar Borrowings are outstanding, then the last day of the Interest Period
in respect of such Eurodollar Borrowings, unless the Borrower has paid
compensation required by Section 5.02): (A) the amount of the Aggregate Maximum
Credit Amounts shall be increased as set forth therein, and (B) in the case of
an Additional Lender Certificate, any Additional Lender party thereto shall be a
party to this Agreement and the other Loan Documents and have the rights and
obligations of a Lender under this Agreement and the other Loan Documents. In
addition, the Lender or the Additional Lender, as applicable, shall purchase a
pro rata portion of the outstanding Loans (and participation interests in
Letters of Credit) of each of the other Lenders (and such Lenders hereby agree
to sell and to take all such further action to effectuate such sale) such that
each Lender (including any Additional Lender, if applicable) shall hold its
Applicable Percentage of the outstanding Loans (and participation interests)
after giving effect to the increase in the Aggregate Maximum Credit Amounts.
(iv) Upon its receipt of a duly completed Maximum Credit Amount Increase
Certificate or an Additional Lender Certificate, executed by the Borrower and
the Lender or the Borrower and the Additional Lender party thereto, as
applicable, the processing and recording fee referred to in Section 2.06(c)(ii),
the Administrative Questionnaire referred to in Section 2.06(c)(ii), if
applicable, and the written consent of the Administrative Agent to such increase
required by Section 2.06(c)(i), the Administrative Agent shall accept such
Maximum Credit Amount Increase Certificate or Additional Lender Certificate and
record the information contained therein in the Register required to be
maintained by the Administrative Agent pursuant to Section 12.04(b)(iv).
2.6 Amendment to Section 2.07(c)(i). Section 2.07(c)(i) of the Credit Agreement
is hereby amended by deleting the last sentence thereof.
2.7 Amendment to Section 7.21. Section 7.21 of the Credit Agreement is hereby
amended and restated as follows:
Section 7.21 Use of Loans and Letters of Credit. The proceeds of the Loans and
the Letters of Credit shall be used to provide working capital for exploration
and production operations and for general corporate purposes (including, without
limitation, the repurchase of stock to the extent permitted by Section 9.04(a)
hereof). It and its Subsidiaries are not engaged principally, or as one of its
or their important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or carrying margin
stock (within the meaning of Regulation T, U or X of the Board). No part of the
proceeds of any Loan or Letter of Credit will be used for any purpose which
violates the provisions of Regulations T, U or X of the Board.

 

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2.8 Amendment to Required Mortgage and Title Percentages. Sections 8.13 and
8.14(a) of the Credit Agreement are hereby amended by deleting each reference to
“85%” contained in each such Section and inserting in lieu thereof in each
instance a reference to “80%”.
2.9 Amendment to Section 8.16. Section 8.16 of the Credit Agreement is hereby
amended by deleting the reference to “the Required Lenders” contained therein
and inserting in lieu thereof a reference to “the Lenders”.
2.10 Amendment to Section 9.04(a). Section 9.04(a) of the Credit Agreement is
hereby amended and restated as follows:
(a) Restricted Payments. The Parent will not, and will not permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, return any capital to its Equity Interest
holders or make any distribution of its Property to its Equity Interest holders,
except: (i) the Parent may declare and pay dividends with respect to its Equity
Interests payable solely in additional shares of its Equity Interests (other
than Disqualified Capital Stock), (ii) Subsidiaries of the Borrower may declare
and pay dividends ratably with respect to their Equity Interests, (iii) the
Parent may make Restricted Payments pursuant to and in accordance with stock
option plans or other benefit plans for management or employees of the Parent
and its Subsidiaries, (iv) so long as no Default, Event of Default or Borrowing
Base Deficiency exists, the Borrower may, for any period, declare and pay cash
dividends to the Parent to permit and to pay accrued dividends for such period
on the Convertible Preferred Stock in accordance with the terms of the
certificate of designation as in effect on the Effective Date, (v) so long as no
Default, Event of Default or Borrowing Base Deficiency exists, the Parent may,
for any period, declare and pay cash dividends accrued and payable for such
period on the Convertible Preferred Stock in accordance with the terms of the
certificate of designation as in effect on the Effective Date, and (vi) so long
as no Default, Event of Default or Borrowing Base Deficiency exists or results
therefrom, and so long as after giving effect to such repurchase the Borrower’s
Liquidity is greater than twenty percent (20%) of the total Commitments at such
time, the Parent may repurchase up to an aggregate amount of $10,000,000 of the
Equity Interests in the Parent during the term of this Agreement.
2.11 Amendment to Section 12.02(b). Section 12.02(b) of the Credit Agreement is
hereby amended and restated as follows:
(b) Neither this Agreement nor any provision hereof nor any Security Instrument
nor any provision thereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Parent, the Borrower
and the Majority Lenders or by the Parent, the Borrower and the Administrative
Agent with the consent of the Majority Lenders; provided that no such agreement
shall (i) increase the Commitment or the Maximum Credit Amount of any Lender
without the written consent of such Lender, (ii) increase the Borrowing Base
without the written consent of each Lender (other than Defaulting Lenders),
decrease or maintain the Borrowing Base without the consent of the Required
Lenders, or modify

 

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Section 2.07 in any manner without the consent of each Lender (other than
Defaulting Lenders), (iii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, or reduce any other Indebtedness hereunder or under any other Loan
Document, without the written consent of each Lender affected thereby,
(iv) postpone the scheduled date of payment or prepayment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or any other Indebtedness hereunder or under any other Loan
Document, or reduce the amount of, waive or excuse any such payment, or postpone
or extend the Termination Date without the written consent of each Lender
affected thereby, (v) change Section 4.01(b) or Section 4.01(c) in a manner that
would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (vi) waive or amend Section 3.04(b),
Section 6.01, Section 8.14, Section 10.02(c) or Section 12.14 or change the
definition of the terms “Domestic Subsidiary”, “Foreign Subsidiary” or
“Subsidiary”, without the written consent of each Lender (other than Defaulting
Lenders), (vii) release any Guarantor (except as set forth in the Guaranty
Agreement), release any of the collateral (other than as provided in
Section 11.10), or reduce the percentage set forth in Section 8.14(a) to less
than 80%, without the written consent of each Lender (other than Defaulting
Lenders), or (viii) change any of the provisions of this Section 12.02(b) or the
definitions of “Majority Lenders”, “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Loan Documents or make any
determination or grant any consent hereunder or any other Loan Documents,
without the written consent of each Lender (other than Defaulting Lenders);
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, any other Agent, or the
Issuing Bank hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent, such other Agent or the Issuing
Bank, as the case may be. Notwithstanding the foregoing, any supplement to
Schedule 7.14 (Subsidiaries) shall be effective simply by delivering to the
Administrative Agent a supplemental schedule clearly marked as such and, upon
receipt, the Administrative Agent will promptly deliver a copy thereof to the
Lenders.
2.12 Replacement of Annex I — List of Maximum Credit Amounts. Annex I to the
Credit Agreement is hereby replaced in its entirety with the Annex I attached
hereto and the Annex I attached hereto shall be deemed to be attached as Annex I
to the Credit Agreement. After giving effect to this Fourth Amendment and any
Borrowings made on the Fourth Amendment Effective Date, (a) each Lender who
holds Loans in an aggregate amount less than its Applicable Percentage (after
giving effect to this Fourth Amendment) of all Loans shall advance new Loans
which shall be disbursed to the Administrative Agent and used to repay Loans
outstanding to each Lender who holds Loans in an aggregate amount greater than
its Applicable Percentage of all Loans, (b) each Lender’s participation in each
Letter of Credit, if any, shall be automatically adjusted to equal its
Applicable Percentage (after giving effect to this Fourth Amendment), and
(c) such other adjustments shall be made as the Administrative Agent shall
specify so that the Revolving Credit Exposure applicable to each Lender equals
its Applicable Percentage (after giving effect to this Fourth Amendment) of the
aggregate Revolving Credit Exposure of all Lenders.

 

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2.13 New Exhibits. Exhibit H-1 and Exhibit H-2 to this Fourth Amendment are
hereby added as Exhibit H-1 and Exhibit H-2 to the Credit Agreement and
Exhibit H-1 and Exhibit H-2 attached hereto shall be deemed to be attached as
Exhibit H-1 and Exhibit H-2 to the Credit Agreement, respectively.
Section 3. New Lenders. Each New Lender hereby joins in, becomes a party to, and
agrees to comply with and be bound by the terms and conditions of the Credit
Agreement as a Lender thereunder and under each and every other Loan Document to
which any Lender is required to be bound by the Credit Agreement, to the same
extent as if such New Lender were an original signatory thereto. Each New Lender
hereby appoints and authorizes the Administrative Agent to take such action as
the Administrative Agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to the Administrative
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto. Each New Lender represents and warrants that
(a) it has full power and authority, and has taken all action necessary, to
execute and deliver this Fourth Amendment, to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (b) it
has received a copy of the Credit Agreement and copies of the most recent
financial statements delivered pursuant to Section 8.01 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Fourth Amendment and to become a Lender
on the basis of which it has made such analysis and decision independently and
without reliance on the Administrative Agent or any other Lender, and (c) from
and after the Fourth Amendment Effective Date, it shall be a party to and be
bound by the provisions of the Credit Agreement and the other Loan Documents and
have the rights and obligations of a Lender thereunder.
Section 4. Redetermination of the Borrowing Base. For the period from and
including the Fourth Amendment Effective Date to but excluding the next
Redetermination Date, the amount of the Borrowing Base shall be $125,000,000.
Notwithstanding the foregoing, (a) 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) and (b) the Lenders and the Borrower agree that the
redetermination provided for in this Section 4 shall constitute the Scheduled
Redetermination of the Borrowing Base scheduled for on or about September 30,
2011.
Section 5. Conditions Precedent. The amendments contained in Section 2 hereof,
and the effectiveness of the Borrowing Base redetermination contained in
Section 4 hereof, shall be effective on the date (the “Fourth Amendment
Effective Date”) that each of the following conditions precedent is satisfied
(or waived in accordance with Section 12.02 of the Credit Agreement):
5.1 Counterparts. The Administrative Agent shall have received from each of the
Lenders, the Borrower and each Guarantor, counterparts (in such number as may be
requested by the Administrative Agent) of this Fourth Amendment signed on behalf
of such Persons.

 

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5.2 Fees. In consideration for the agreements set forth herein, the Borrower
shall have paid to the Administrative Agent any and all fees payable to the
Administrative Agent or Lenders pursuant to or in connection with the this
Fourth Amendment.
5.3 Notes. The Administrative Agent shall have received duly executed Notes
payable to the order of each Lender (including the New Lenders) whose Maximum
Credit Amount will change as a result of the amendment to Annex I to the Credit
Agreement set forth herein, with such Note being in a principal amount equal to
its Maximum Credit Amount as indicated on Annex I to the Credit Agreement (as
amended hereby).
5.4 Mortgages/Mortgage Amendments. The Administrative Agent shall have received
such duly executed Mortgages (including any amendments to Mortgages) duly
executed and delivered by the Borrower and its Subsidiaries (as applicable),
together with such other assignments, conveyances, amendments, agreements, and
other writings including, without limitation, UCC-1 financing statements, and
tax affidavits, if any, required so that the Administrative Agent is reasonably
satisfied that the Mortgages (including any amendments to Mortgages and
Mortgages previously delivered) create first priority, perfected Liens (subject
only to Excepted Liens, but subject to the provisos at the end of such
definition) on Oil and Gas Properties comprising at least 80% of the total value
of the Oil and Gas Properties evaluated in the most recently completed Reserve
Report for the purposes of establishing the Borrowing Base pursuant to Section 4
hereof, or otherwise as requested by the Administrative Agent to reflect the
amendments contained in this Fourth Amendment, including, without limitation,
the extension of the Maturity Date.
5.5 Organization/Existence/Authority Documents. The Administrative Agent shall
have received such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of the Borrower and each Guarantor, the authorization of this Fourth
Amendment and the transactions contemplated hereby, and any other legal matters
relating to Borrower, the Guarantors and this Fourth Amendment.
5.6 Opinions. The Administrative Agent shall have received opinions of counsel
to the Borrower and each Guarantor, favorably opining as to such matters as the
Administrative Agent may reasonably request.
5.7 Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent or special counsel to the Administrative
Agent may reasonably request.
5.8 No Default/No Event of Default/No Borrowing Base Deficiency. No Default,
Event of Default or Borrowing Base Deficiency shall have occurred and be
continuing, after giving effect to the terms of this Fourth Amendment.
The Administrative Agent is hereby authorized and directed to declare this
Fourth 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 5. Such declaration shall be final,
conclusive and binding upon all parties to the Credit Agreement for all
purposes.

 

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Section 6. Miscellaneous.
6.1 Confirmation. The provisions of the Credit Agreement, as amended by this
Fourth Amendment, shall remain in full force and effect following the
effectiveness of this Fourth Amendment.
6.2 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 Fourth 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 and
(iii) no Material Adverse Effect shall have occurred.
6.3 Loan Document. This Fourth 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.
6.4 Counterparts. This Fourth 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 Fourth Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
6.5 NO ORAL AGREEMENT. THIS FOURTH 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 FOURTH 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.

 

11

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6.6 GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
6.7 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 Fourth 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.
6.8 Severability. Any provision of this Fourth 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.
6.9 Successors and Assigns. This Fourth Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
[SIGNATURES BEGIN NEXT PAGE]

 

12

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

     
BORROWER:
  PETROQUEST ENERGY, L.L.C.
 
   
 
  /s/ J. Bond Clement
 
   
 
  J. Bond Clement
Executive Vice President, Chief Financial Officer
and Treasurer
 
   
PARENT:
  PETROQUEST ENERGY, INC.
 
   
 
  /s/ J. Bond Clement
 
   
 
  J. Bond Clement
Executive Vice President, Chief Financial Officer
and Treasurer
 
   
GUARANTOR:
  TDC ENERGY, LLC
 
   
 
  /s/ J. Bond Clement
 
   
 
  J. Bond Clement
Executive Vice President, Chief Financial Officer
and Treasurer

Signature Page to Fourth Amendment to Credit Agreement — PetroQuest Energy, Inc.

 

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          ADMINISTRATIVE AGENT:
AND LENDER   JPMORGAN CHASE BANK, N.A.
individually, as a Lender, as Administrative Agent and as Issuing Bank
 
       
 
  By:   /s/ Jo Linda Papadakis
 
       
 
      Jo Linda Papadakis
Authorized Officer

Signature Page to Fourth Amendment to Credit Agreement — PetroQuest Energy, Inc.

 

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          LENDER:   WELLS FARGO BANK, N.A.
 
       
 
  By:   /s/ Doug McDowell
 
       
 
      Name: Doug McDowell
 
      Title: Director

Signature Page to Fourth Amendment to Credit Agreement — PetroQuest Energy, Inc.

 

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          LENDER:   CAPITAL ONE, N.A.
 
       
 
  By:   /s/ Nancy M. Mak
 
       
 
      Name: Nancy M. Mak
 
      Title: Vice President

Signature Page to Fourth Amendment to Credit Agreement — PetroQuest Energy, Inc.

 

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          LENDER:   IBERIABANK
 
       
 
  By:   /s/ Cameron D. Jones
 
       
 
      Name: Cameron D. Jones
 
      Title: Vice President

Signature Page to Fourth Amendment to Credit Agreement — PetroQuest Energy, Inc.

 

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          LENDER:   WHITNEY BANK
 
       
 
  By:   /s/ William Jochetz
 
       
 
      Name: William Jochetz
 
      Title: Assistant Vice President

Signature Page to Fourth Amendment to Credit Agreement — PetroQuest Energy, Inc.

 

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ANNEX I
LIST OF MAXIMUM CREDIT AMOUNTS

                  Name of Lender   Applicable Percentage     Maximum Credit
Amount  
JPMorgan Chase Bank, N.A.
    25.00 %   $ 25,000,000  
Wells Fargo Bank, N.A.
    20.00 %   $ 20,000,000  
Capital One, N.A.
    20.00 %   $ 20,000,000  
Iberiabank
    20.00 %   $ 20,000,000  
Whitney Bank
    15.00 %   $ 15,000,000  
TOTAL
    100.00 %   $ 100,000,000  

 Annex I - 1

 

 

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EXHIBIT H-1
FORM OF MAXIMUM CREDIT AMOUNT INCREASE AGREEMENT
THIS MAXIMUM CREDIT AMOUNT INCREASE AGREEMENT (this “Agreement”) dated as of
[_____], is between [Insert name of Existing Lender] (“Existing Lender”),
PETROQUEST ENERGY, L.L.C. (“Borrower”), and JPMORGAN CHASE BANK, N.A. as
administrative agent (in such capacity, together with its successors in such
capacity, the “Administrative Agent”) for the lenders party to the Credit
Agreement referred to below. Each capitalized term used herein but not otherwise
defined herein has the meaning given such term in the Credit Agreement.
R E C I T A L S
A. The Borrower, the Administrative Agent and the other Agents and certain
Lenders have heretofore entered into a Credit Agreement, dated as of October 2,
2008 as amended from time to time (the “Credit Agreement”).
B. The Borrower has heretofor requested pursuant to Section 2.06 of the Credit
Agreement that the Aggregate Maximum Credit Amounts be increased to $ [_____] by
increasing the Maximum Credit Amount of a Lender.
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 1.01 Commitment Increase.
(a) Pursuant to Section 2.06(c) of the Credit Agreement, effective as of the
Effective Date (used herein as defined below) the Existing Lender’s Maximum
Credit Amount is hereby increased from $[_____] to $[_____].
(b) Effective as of the Effective Date the increase in the Existing Lender’s
Maximum Credit Amount hereby supplements Annex I to the Credit Agreement, such
that after giving effect to the inclusion of the Maximum Credit Amount increase
contemplated hereby, Annex I to the Credit Agreement is amended and restated to
read as set forth on Schedule 2.06 attached hereto.
Section 1.02 Representations and Warranties; Agreements. The Existing Lender
hereby: (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, (ii) it has received a copy of
the Credit Agreement, together with copies of the most recent financial
statements delivered thereunder, and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Agreement and to increase its Commitment, on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, and (ii) it will perform in accordance with
the terms of the Credit Agreement, all of the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender (including,
without limitation, any obligations of it, if any, under Section 2.06(c) of the
Credit Agreement).

 

Exhibit H-1 - 1

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Section 1.03 Effectiveness. This Agreement shall become effective as of [_____]
(the “Effective Date”), subject to the Administrative Agent’s receipt of
(a) counterparts of this Agreement duly executed on behalf of [each Existing
Lender] and the Borrower; and (b) an Administrative Questionnaire duly completed
by each Additional Lender.
Section 1.04 Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or other electronic image scan transmission shall be as
effective as delivery of a manually executed counterpart of this Agreement.
Section 1.05 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
Section 1.06 Severability. In case any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any
respect, none of the parties hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Credit Agreement shall not in any way be
affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
Section 1.07 Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 12.01 of the Credit Agreement.

 

Exhibit H-1 - 2

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

              PETROQUEST ENERGY, L.L.C.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
        Administrative Agent:   JPMORGAN CHASE BANK, N.A.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
        Existing Lender:   [                                        ]
 
       
 
  By:    
 
       
 
      Name:
 
      Title:

 

Exhibit H-1 - 3

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SCHEDULE 2.06
LIST OF MAXIMUM CREDIT AMOUNTS AFTER
MAXIMUM CREDIT AMOUNT INCREASE AGREEMENT
Aggregate Maximum Credit Amounts

                  Name of Lender   Applicable Percentage     Maximum Credit
Amount  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
[       ]
    [       ] %   $ [      ]  
TOTAL:
    100.00 %   $ [      ]  

 

Exhibit H-1 - 4

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EXHIBIT H-2
FORM OF ADDITIONAL LENDER AGREEMENT
THIS ADDITIONAL LENDER AGREEMENT (this “Agreement”) dated as of [_____], is
between [Insert name of Additional Lender] (the “Additional Lender”), PETROQUEST
ENERGY, L.L.C. (“Borrower”), and JPMORGAN CHASE BANK, N.A. as administrative
agent (in such capacity, together with its successors in such capacity, the
“Administrative Agent”) for the lenders party to the Credit Agreement referred
to below. Each capitalized term used herein but not otherwise defined herein has
the meaning given such term in the Credit Agreement.
R E C I T A L S
A. The Borrower, the Administrative Agent and the other Agents and certain
Lenders have heretofore entered into a Credit Agreement, dated as of October 2,
2008 as amended from time to time (the “Credit Agreement”).
B. The Borrower has heretofor requested pursuant to Section 2.06 of the Credit
Agreement that the Aggregate Maximum Credit Amounts be increased to $[_____] by
causing the Additional Lender to become a Lender.
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 1.01 Additional Lender.
(a) Pursuant to Section 2.06(c) of the Credit Agreement, effective as of the
Effective Date (used herein as defined below) [Insert name of Additional Lender]
is hereby added as an Lender under the Credit Agreement with a Maximum Credit
Amount of $[_____].
(b) Effective as of the Effective Date: the Additional Lender shall become a
Lender for all purposes of the Credit Agreement and shall have all of the rights
and obligations of a Lender thereunder. After giving effect to the increase in
the Aggregate Maximum Credit Amounts contemplated hereby, Annex I to the Credit
Agreement is amended and restated to read as set forth on Schedule 2.06 attached
hereto.
Section 1.03 Representations and Warranties; Agreements. The Additional Lender
hereby: (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the
Credit Agreement that are required to be satisfied by it in order to become a
Lender under the Credit Agreement, (iii) from and after the Effective Date (as
defined herein), it shall be bound by the provisions of the Credit Agreement as
a Lender thereunder and shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered thereunder, and such other documents
and information as it has deemed appropriate to make its

 

Exhibit H-2 - 1

--------------------------------------------------------------------------------

 

own credit analysis and decision to enter into this Agreement and to acquire or
increase its Commitment, as the case may be, on the basis of which it has made
such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if the Additional Lender is a
Foreign Lender, any documentation required to be delivered by such Additional
Lender pursuant to Section 5.03(d) of the Credit Agreement has been duly
completed and executed by the Additional Lender; and (b) agrees that (i) it
will, independently and without reliance on the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement, and (ii) it will perform in
accordance with the terms of the Credit Agreement, all of the obligations which
by the terms of the Credit Agreement are required to be performed by it as a
Lender (including, without limitation, any obligations of it, if any, under
Section 2.06(c) of the Credit Agreement).
Section 1.04 Effectiveness. This Agreement shall become effective as of [_____]
(the “Effective Date”), subject to the Administrative Agent’s receipt of
(a) counterparts of this Agreement duly executed on behalf the Additional Lender
and the Borrower; and (b) an Administrative Questionnaire duly completed by the
Additional Lender.
Section 1.05 Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or other electronic image scan transmission shall be as
effective as delivery of a manually executed counterpart of this Agreement.
Section 1.06 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
Section 1.07 Severability. In case any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any
respect, none of the parties hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Credit Agreement shall not in any way be
affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
Section 1.08 Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 12.01 of the Credit Agreement; provided
that all communications and notices hereunder to each Additional Lender shall be
given to it at the address set forth in its Administrative Questionnaire.

 

Exhibit H-2 - 2

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

              PETROQUEST ENERGY, L.L.C.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
        Administrative Agent:   JPMORGAN CHASE BANK, N.A.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
        Additional Lender:   [                                        ]
 
       
 
  By:    
 
       
 
      Name:
 
      Title:

 

Exhibit H-2 - 3

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SCHEDULE 2.06
LIST OF MAXIMUM CREDIT AMOUNTS AFTER
MAXIMUM CREDIT AMOUNT INCREASE AGREEMENT
Aggregate Maximum Credit Amounts

                  Name of Lender   Applicable Percentage     Maximum Credit
Amount  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
[      ]
    [     ] %   $ [     ]  
TOTAL:
    100.00 %   $ [     ]  

 

Exhibit H-2 - 4