exv10w20






Exhibit 10.20




EXECUTION




FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT




     THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “First Amendment”)
is entered into as of February 21, 2011 among QUEST EASTERN RESOURCE LLC, a Delaware limited
liability company (the “Borrower”), ROYAL BANK OF CANADA, as the Lender, and ROYAL BANK OF CANADA,
as Administrative Agent and Collateral Agent for the Lender party to the hereinafter defined Credit
Agreement (in such capacities, the “Agent”).



     Reference is made to the Third Amended and Restated Credit Agreement dated as of September 21,
2010 among the Borrower, the Agent and the Lender party thereto (as amended, the “Credit
Agreement”). Unless otherwise defined in this First Amendment, capitalized terms used herein shall
have the meaning set forth in the Credit Agreement; all section, exhibit and schedule references
herein are to sections, exhibits and schedules in the Credit Agreement; and all paragraph
references herein are to paragraphs in this First Amendment.



RECITALS



     A. The Borrower, the Agent and the Lender desire to enter into this First Amendment.



     Accordingly, for adequate and sufficient consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:



     Paragraph 1. Amendments. Effective as of the First Amendment Effective Date
(hereinafter defined), the Credit Agreement is amended as follows:



     1.1 Definitions. Section 1.01 of the Credit Agreement is amended as follows:



     (a) The following definitions are amended in their entirety to read as follows:




     “Agreement means this Third Amended and Restated Credit Agreement, as amended
by the First Amendment to Credit Agreement.”




     “Asset Sale Agreement means that certain Asset Sale Agreement, dated as of
September 21, 2010 among PEC and the Lender, as amended by that certain Letter
Agreement dated as of December 23, 2010 among the Borrower, the Lender and the
Administrative Agent and Collateral Agent, providing that if pursuant to an Approved
Disposition the limited liability company membership interest in the Borrower or Oil
and Gas Properties generate less than a specified amount of Net Cash Proceeds, PEC
will pay, either in cash or common stock of PEC or some combination of both, a
specified amount to the Lender.”




     “Interest Payment Date means, (a) as to a Eurodollar Rate Loan, the last day of
each Interest Period applicable to such Eurodollar Rate Loan occurring after May 16,
2011; provided, however, that if any Interest Period for a Eurodollar Rate Loan
occurring after May 16, 2011 exceeds three months, the respective dates that fall every
three months after the beginning of such Interest Period shall also be Interest
Payment Dates;



First Amendment to

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Restated Credit Agreement








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and (b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December, commencing June 30, 2011, and the Maturity Date.”



     (b) The following definitions are inserted alphabetically into Section 1.01 of the Credit
Agreement:




     “First Amendment Effective Date means February 21, 2011.”




     “First Amendment to Credit Agreement means that certain First Amendment to
Third Amended and Restated Credit Agreement dated as of February 21, 2011, but
effective as of the First Amendment Effective Date, among the Borrower, Royal Bank
of Canada, as Lender, and Royal Bank of Canada, as Administrative Agent and
Collateral Agent.”



     1.2 Section 10.01(b). The first sentence of Section 10.01(b) of the Credit Agreement
is amended by deleting the words “5 Business Days’” from such sentence.



     1.3 Section 10.01(c). Section 10.01(c) of the Credit Agreement is amended to read in
its entirety as follows:




     “(c) If (i) pursuant to an Approved Disposition, (A) 100% of the limited
liability company membership interest in Borrower is sold or (B) the Borrower sells
all or substantially all of its Oil and Gas Properties or (ii) the Renewal Term Loan
and other Obligations (other than contingent indemnity obligations) have been
indefeasibly paid in full, or otherwise deemed to have been satisfied pursuant to
the Asset Sale Agreement, then, in either event, (x) the Administrative Agent agrees
to, and the Lender hereby instructs the Administrative Agent and Collateral Agent
to, at the Borrower’s expense, execute and authorize such releases of the Collateral
Documents as the Borrower shall reasonably request and this Agreement shall be
deemed terminated and (y) the Lender agrees to execute reconveyances of the ORRIs to
their respective grantors (or their designees). Lender further agrees that any
payments owing under any ORRI shall accrue and will not be payable until May 17,
2011; provided if an Approved Disposition occurs on or prior to May 16, 2011, Lender
agrees no payment will be made on account of accrued but unpaid royalties under the
ORRI.”



     Paragraph 2. Effective Date. This First Amendment shall not become effective until
the date (such date, the “First Amendment Effective Date”) that (i) the Agent receives this First
Amendment, executed by the Borrower, the Agent and the Lender and (ii) the Agent receives a Consent
and Reaffirmation in form and substance satisfactory to the Agent from PEC and PESC.



     Paragraph 3. Acknowledgment and Ratification. The Borrower (i) consents to the
agreements in this First Amendment and (ii) agrees and acknowledges that the execution, delivery,
and performance of this First Amendment shall in no way release, diminish, impair, reduce, or
otherwise affect the obligations of the Borrower under the Loan Documents to which it is a party,
which Loan Documents shall remain in full force and effect, as amended hereby, and all rights
thereunder are hereby ratified and confirmed.



     Paragraph 4. Representations. The Borrower represents and warrants to the Agent and
the Lender that as of the First Amendment Effective Date and after giving effect to the amendments
set forth in this First Amendment (a) all representations and warranties in the Loan Documents are
true and correct



First Amendment to

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Restated Credit Agreement








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in all material respects as though made on the date hereof, except to the extent that any of
them speak to a different specific date, and (b) no Default or Event of Default exists.




     Paragraph 5. Expenses. The Borrower shall pay on demand all reasonable costs, fees,
and expenses paid or incurred by the Agent incident to this First Amendment, including, without
limitation, Attorney Costs in connection with the negotiation, preparation, delivery, and execution
of this First Amendment and any related documents, filing and recording costs, and the costs of
title insurance endorsements, if any.



     Paragraph 6. Miscellaneous.


(a) This First Amendment is a “Loan Document” referred to in the Credit Agreement. The provisions
relating to the Loan Agreement (as amended hereby) and the other Loan Documents in Article X of the
Credit Agreement are incorporated in this First Amendment by reference. Unless stated otherwise
(i) the singular number includes the plural and vice versa and words of any gender include each
other gender, in each case, as appropriate, (ii) headings and captions may not be construed in
interpreting provisions, (iii) this First Amendment will be construed, and its performance
enforced, under New York law and applicable federal law, (iv) if any part of this First Amendment
is for any reason found to be unenforceable, all other portions of it nevertheless remain
enforceable, and (v) this First Amendment may be executed in any number of counterparts with the
same effect as if all signatories had signed the same document, and all of those counterparts must
be construed together to constitute the same document.




     Paragraph 7. Entire Agreement. This First Amendment represents the final agreement
between the parties about the subject matter of this amendment 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.



     Paragraph 8. Parties. This First Amendment binds and inures to the benefit of the
Borrower, the Agent, the Lender, and their respective successors and assigns.



     Paragraph 9. Further Assurances. The parties hereto each agree to execute from time to
time such further documents as may be necessary to implement the terms of this First Amendment.



     Paragraph 10. Release. As additional consideration for the execution, delivery and performance of this First
Amendment by the parties hereto and to induce the Agent and the Lender to enter into this First
Amendment, the Borrower warrants and represents to the Agent and the Lender that 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 the Agent or any Lender or any defense to (i) the payment of Obligations under the Renewal
Term Loan Note and/or the Loan Documents, or (ii) the performance of any of its obligations with
respect to the Renewal Term Loan Note and/or the Loan Documents. In the event any such facts,
events, statuses or conditions exist or have existed, the Borrower unconditionally and irrevocably
hereby RELEASES, RELINQUISHES and forever DISCHARGES the Agent and the Lender, as well as their
predecessors, successors, assigns, agents, officers, directors, shareholders, employees and
representatives, of and from any and all claims, demands, actions and causes of action of any and
every kind or character, past or present, which the Borrower may have against any of them or their
predecessors, successors, assigns, agents, officers, directors, shareholders, employees and
representatives arising out of or with respect to (a) any right or power to bring any claim for
usury or to pursue any cause of action based on any claim of usury, and (b)
any and all transactions relating to the Loan Documents occurring prior to the date hereof,
including any



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Restated Credit Agreement






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loss, cost or damage, of any kind or character, arising out of or in any way
connected with or in any way resulting from the acts, actions or omissions of any of them, and
their predecessors, successors, assigns, agents, officers, directors, shareholders, employees and
representatives, including any breach of fiduciary duty, breach of any duty of fair dealing, breach
of confidence, breach of funding commitment, undue influence, duress, economic coercion, conflict
of interest, negligence, bad faith, malpractice, intentional or negligent infliction of mental
distress, tortious interference with contractual relations, tortious interference with corporate
governance or prospective business advantage, breach of contract, deceptive trade practices, libel,
slander or conspiracy, but in each case only to the extent permitted by applicable Law.




     Paragraph 11. Effectiveness of Facsimile Documents and Signatures. Delivery of an
executed counterpart of a signature page of this First Amendment by telecopy, facsimile, photocopy
or by sending a scanned copy by electronic mail shall be effective as delivery of a manually
executed counterpart of this First Amendment. The effectiveness of any such signatures shall,
subject to applicable Law, have the same force and effect as manually signed originals and shall be
binding on the Borrower, the Agent and the Lender.



Remainder of Page Intentionally Blank

Signature Pages to Follow.



First Amendment to

QER Third Amended and

Restated Credit Agreement






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     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly
executed as of the First Amendment Effective Date.



	 	 	 	 	 	 	 	 	 

	 	 	BORROWER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	QUEST EASTERN RESOURCE LLC,	 	 
	 	 	a Delaware limited liability company, as Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	POSTROCK ENERGY SERVICES	 	 
	 	 	 	 	CORPORATION, its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ David C. Lawler
 

David C. Lawler, President 


and Chief Executive Officer
	 	 






Signature Page 1



First Amendment to

QER Third Amended and

Restated Credit Agreement




 









 





	 	 	 	 	 	 	 

	AGREED TO AS OF THE FIRST
	 	 	 	 	 	 
	AMENDMENT EFFECTIVE DATE:	 	AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA,	 	 
	 	 	as Administrative Agent and Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Susan Khokher
 

Susan Khokher
	 	 
	 

	 	Title:
	 	 Manager, Agency	 	 






Signature Page 2




First Amendment to

QER Third Amended and

Restated Credit Agreement







 









 








	 	 	 	 	 	 	 

	AGREED TO AS OF THE FIRST
	 	 	 	 	 	 
	AMENDMENT EFFECTIVE DATE:	 	LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Leslie P. Vowell
 

Leslie P. Vowell
	 	 
	 

	 	 	 	Attorney-in-Fact	 	 






Signature Page 3



First Amendment to

QER Third Amended and

Restated Credit Agreement