Document:

Exhibit 10.11

Exhibit 10.11

DEED OF HYPOTHEC

ON THE UNIVERSALITY OF MOVABLE PROPERTY

EXECUTED by the parties hereto as of the 26th day of August, 2008.

	 	 	 
	BETWEEN:

	 	4278941 CANADA INC., a company duly constituted under the laws of Canada, having its
registered office at 20600 Clark Graham Blvd., Baie d’Urfé, Québec, Canada, H9X 4B6,
	 
	 	 
	 

	 	(hereinafter referred to as the “Grantor”)
	 
	 	 
	AND:

	 	BANK OF AMERICA, N.A., a national banking association organized under the federal laws
of the United States of America, having a place of business at 335 Madison Avenue, New
York, New York 10017 herein acting (i) for its own benefit as Lender (acting through
its Canada branch) and as Collateral Agent for its own benefit and the benefit of the
other present and future Secured Parties, and (ii) as solidary creditor of such other
present and future Secured Parties, and any successors thereto in such capacities,
	 
	 	 
	 

	 	(hereinafter referred to as the “Collateral Agent”)

THE PARTIES HERETO HAVE AGREED AS FOLLOWS:

1. SECURED OBLIGATIONS

The hypothec granted by this deed secures the performance of the following obligations
(hereinafter collectively called the “Secured Obligations”):

	 	1.1	 	the prompt payment, as and when due and payable, of all the Secured Obligations
(as such term is defined in the Credit Agreement, hereinafter defined) of the Grantor
and Warnaco of Canada Company (the “Borrower”); for the purposes of this deed, the term
“Credit Agreement” shall mean that certain credit agreement dated on or about the date
hereof among, inter alia, the Borrower, the financial institutions, together with their
respective successors and assigns, listed on the signature pages thereof from time to
time, as Lenders, and the Collateral Agent, as the same may be amended, supplemented,
revised, restated or replaced from time to time; unless otherwise defined herein, all
capitalized words and expressions when used herein shall have the same meaning as
ascribed thereto in the Credit Agreement;

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	 	1.2	 	the strict performance and observance by the Grantor of all the agreements,
warranties, representations, covenants, conditions and obligations made pursuant to
this deed, the Credit Agreement or the other Loan Documents, all as now in effect or as
hereafter entered into or amended; and

	 	1.3	 	the prompt payment, as and when due and payable, of all other amounts now or
hereafter owing by the Grantor to the Collateral Agent or any other Secured Party under
the Credit Agreement or the other Loan Documents, including by way of guarantee or
indemnity, whether now existing or hereafter incurred, matured or unmatured, direct,
indirect or contingent, including any extensions and renewals thereof and including the
payment of all amounts payable hereunder and the legitimate costs (including, without
limitation, all reasonable fees, charges and disbursements of counsel) that the
Collateral Agent may incur to recover the obligations secured hereby and to preserve
the Hypothecated Property (as such expression is hereinbelow defined).

2. HYPOTHEC

2.1 Amount of Hypothec

To secure the performance of the Secured Obligations, the Grantor hereby
hypothecates in favour of the Collateral Agent the property described in Section 2.2
hereof for the sum of Fifty Million Canadian dollars (Cdn$50,000,000.00) bearing
interest at the rate of Twenty-Five percent (25%) per annum from the date hereof,
compounded annually.

2.2 Description of Hypothecated Property

The hypothec charges the universality of all the Grantor’s movable property, present
and future, corporeal and incorporeal, of whatsoever nature and kind and wheresoever
situated (hereinafter collectively called the “Hypothecated Property”), including,
without limitation, all tools and equipment pertaining to the enterprises of the
Grantor, all claims and customer accounts, all securities (including, without
limitation, those described in Schedule “B” hereto), all patents, trademarks
and other intellectual property rights (including, without limitation, those
described in Schedule “A” hereto) and all corporeal movables included in the
assets of any of the Grantor’s enterprises kept for sale, lease or processing in the
manufacture or transformation of property intended for sale, for lease or for use in
providing a service.

2.3 Interpretation

The parties hereto acknowledge and confirm as follows:

	 	2.3.1	 	that “General Security Agreement” shall mean that certain
General Security Agreement dated on or about the date hereof between the
Grantor, as Debtor, and the Collateral Agent, as same may be amended,
supplemented, revised, restated or replaced from time to time;

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	 	2.3.2	 	that the hypothec created on the Hypothecated Property
pursuant to this deed is not and shall not be construed as a floating hypothec
within the meaning of articles 2715 et seq. of the Civil Code of Québec;

	 	2.3.3	 	that the hypothec constituted hereunder will remain in full
force and effect for the full amount stipulated in Section 2.1 hereof until
such time as an express written discharge is executed by the Collateral Agent
and delivered to the Grantor. The hypothec, security and rights hereby created
in favour of the Collateral Agent will not be extinguished, reduced, novated or
otherwise affected by any payments made to or amounts received by the
Collateral Agent, directly or indirectly, from the Grantor or any other party
or as a result of any insurance indemnities arising from loss or damage to any
of the Hypothecated Property or by reason of the collection of any claims
hypothecated hereunder; and

	 	2.3.4	 	that should the Secured Obligations at any time be fully
extinguished without an express discharge of the hypothec created hereunder
having been granted, and should any new Secured Obligations arise, the security
created hereunder will secure such new Secured Obligations in the same manner
and to the same extent as if there had never occurred an extinction of any of
the Secured Obligations and the Grantor is and shall remain obligated under the
provisions hereof. The Grantor shall be deemed to have obligated itself for
such new Secured Obligations pursuant to the provisions hereof and the hypothec
herein created shall secure such new Secured Obligations as contemplated by
Article 2797 of the Civil Code of Québec.

3. GRANTOR’S UNDERTAKINGS

3.1 Alienation

The Grantor agrees not to alienate, lease or otherwise dispose of any of the
Hypothecated Property outside the ordinary course of business of its enterprise
unless the Collateral Agent gives its prior written consent or unless otherwise
permitted under the Credit Agreement (each, an “Authorized Transaction”).

In the event of any alienation or rental other than an Authorized Transaction, the
Grantor (who shall not be relieved of any default resulting from such alienation or
rental) shall immediately inform the Collateral Agent of the details of such
alienation or rental and shall in particular provide the Collateral Agent with a
description of the alienated or leased property and any property acquired in
replacement, the name and address of the acquirer or lessee, as well as details
concerning the proceeds of such alienation or rental.

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3.2 Transformation

The Grantor may not, without the Collateral Agent’s prior written consent, or unless
otherwise permitted under the Credit Agreement, transform any of the movables
forming part of the Hypothecated Property either by incorporating such movables into
an immovable or by combining or mixing them with other movables so as to form new
property, unless such immovable or new property are themselves subject or made
subject to the hypothec hereby granted or unless such transformation is made in the
ordinary course of operating an enterprise of the Grantor that is engaged in the
business of manufacturing or transforming property. In no event, however, may the
Grantor transform any such property where such transformation would result in the
Collateral Agent’s security or rights hereunder, including in particular their rank,
being diminished.

In the event of any such transformation, even without the Collateral Agent’s
authorization, the Grantor (who shall not be relieved of the default resulting from
the failure to obtain authorization) shall immediately inform the Collateral Agent
of the details of such transformation and shall in particular provide the Collateral
Agent with a description of the property thereby affected, the name and address of
the owner of the property that may result therefrom and the address where such
property is located.

3.3 Notice of Change of Registered/Head Office

The Grantor shall not change the location of its registered head office or domicile
except in accordance with the Credit Agreement.

4. PROVISIONS APPLICABLE TO THE HYPOTHEC ON CLAIMS

The following provisions apply to claims owed to the Grantor and hypothecated in favour of
the Collateral Agent, including present and future rents payable under current and future
leases affecting all or part of the Hypothecated Property.

4.1 Collection

Except for those claims consisting of securities pledged to the Collateral Agent,
the Grantor shall have authority to collect payments of interest and repayments of
capital made on the claims included in the Hypothecated Property hypothecated in
favour of the Collateral Agent pursuant to this deed, as they fall due. The
Collateral Agent may withdraw this authorization by written notice upon the
occurrence of an Event of Default or an event which, with the giving of notice or
passage of time, or both, would constitute an Event of Default. Notwithstanding
the foregoing, the Collateral Agent may at any time take all necessary steps to set
up this hypothec against the debtors of the hypothecated claims. In such event, the
Grantor undertakes to remit to the Collateral Agent, upon request, all titles,
documents, registers, invoices and accounts evidencing the claims or relating
thereto, whatever the nature of their medium and whatever the form in which they are
accessible, whether written, graphic, taped, filmed, computerized, or other.

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Any payment received by the Grantor on account of any hypothecated claim other than
pursuant to the foregoing authorization shall be received for the Collateral Agent’s
account, and, during the continuance of an Event of Default, shall not entitle the
Grantor to the amounts collected and shall be kept separate from the Grantor’s other
property at all times and remitted forthwith by the Grantor to the Collateral Agent
without compensation.

Notwithstanding the provisions of Section 3.1 hereof, the Grantor is not authorized
to alienate any claim forming a part of a universality of claims hypothecated in
favour of the Collateral Agent without the latter’s prior written consent, or unless
otherwise permitted under the Credit Agreement.

4.2 Collateral Agent’s Rights

The Collateral Agent shall not be obliged to exercise its rights to the hypothecated
claims or to ensure their recovery from the Grantor, whether by legal proceedings or
otherwise. Should the Collateral Agent decide to collect the hypothecated claims,
it shall be at liberty following the occurrence and during the continuance of an
Event of Default to negotiate such arrangements as it deems appropriate with the
Grantor or third parties, to enter into agreements with them with respect to the
claims and any security securing the claims, and even to waive the claims and such
security, the whole without the Grantor’s consent or intervention, and the
Collateral Agent shall not thereby incur any liability toward or be accountable to
the Grantor. Unless the Grantor so requests in writing, the Collateral Agent shall
not be obliged to inform the Grantor of any irregularity in the payment of any
amounts due on the claims. Apart from its obligation to remit to the Grantor any
sums collected over and above the amount of the Secured Obligations in principal,
interest and costs, the Collateral Agent shall not be accountable to the Grantor
with respect to the status of the collections made or any transactions and
arrangements entered into.

4.3 Information

The Collateral Agent may, at its discretion, verify the existence and status of the
claims at any time. The Grantor shall provide the necessary assistance and
information for this purpose and shall take such action in this respect as the
Collateral Agent may reasonably request: in particular, consistent with Section 7.6
of the Credit Agreement, it shall allow the Collateral Agent and its agents to enter
the premises occupied by the Grantor and to consult the Grantor’s accounting
books and registers as well as any document relating to the claims and make copies
thereof.

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The Grantor specifically authorizes the Collateral Agent to communicate with any
third party in order to obtain or transmit any personal information and any
information relating to the claims and to the Grantor for the purpose of verifying
and collecting the claims.

Where the hypothec granted by this deed affects a claim that is itself secured by a
registered hypothec, the Grantor shall inform the Collateral Agent accordingly and
shall supply all the information that the Collateral Agent may request in this
connection.

4.4 Financial Administration Act (Canada)

Where any of the claims are subject to the provisions of the Financial
Administration Act (Canada), the Grantor hereby sells, assigns and transfers the
same absolutely to the Collateral Agent so that, upon a withdrawal of authorization
as referred to in Section 4.1 hereof, the Collateral Agent shall be free to complete
the formalities required to make such assignment fully enforceable.

5. PROVISIONS APPLICABLE TO THE HYPOTHEC ON SECURITIES

5.1 Interpretation

Unless otherwise indicated by the context, “securities” means bills of exchange,
notes, shares, warrants, bonds, debentures and other securities considered or
acknowledged as securities, as well as the renewals, substitutions and additions to
which they are subject and the securities and other property received or issued
pursuant to any transformation of such securities, along with all income derived and
all rights arising therefrom.

5.2 Delivery

The Grantor shall deliver to the Collateral Agent, or to a mutually agreed upon
third party, for the benefit of the Secured Parties, all certificates and
instruments representing or evidencing any securities, whether now existing or
hereafter acquired, in suitable form for transfer by delivery or, as applicable,
accompanied by such Grantor’s endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent.

The Collateral Agent shall have the right, following an Event of Default and without
notice to the Grantor, to transfer to or to register in its name or in the name of
its nominees any hypothecated securities. The Collateral Agent shall
have the right at any time to exchange any certificate or instrument representing or
evidencing any hypothecated securities for certificates or instruments of smaller or
larger denominations.

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The Grantor further undertakes to turn over to the Collateral Agent or to such third
party, as soon as the Grantor becomes entitled thereto, the renewals, substitutions
and additions to which such securities are subject and the securities and other
property received or issued upon the purchase, redemption, conversion, cancellation
or any other transformation thereof, along with any income derived and any rights
arising therefrom, the same, where applicable, to be duly endorsed in blank for
transfer and accompanied by any power of attorney, document and confirmation that
the Collateral Agent may reasonably require for such purpose.

5.3 Dividends and other Distributions

Unless an Event of Default has occurred and is continuing, the Grantor may collect
all cash dividends payable in respect of the securities, provided that all
cash dividends payable in respect of the securities which are determined by the
Collateral Agent, in its absolute discretion, to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital, shall be paid
to the Collateral Agent and retained by it as part of the Hypothecated Property.
The Collateral Agent shall be entitled to receive directly, and to retain as part of
the Hypothecated Property;

	 	(a)	 	all other or additional stock or securities or property (other
than cash) paid or distributed by way of dividend in respect of the securities;

	 	(b)	 	all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the securities by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and

	 	(c)	 	all other or additional stock or other securities or property
which may be paid in respect of the securities by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation or similar
corporate reorganization or other disposition of securities.

If any sum of money or property so paid or distributed in respect of any Pledged
Collateral shall be received by the Grantor, the Grantor shall, until such money or
property is paid or delivered to the Collateral Agent, hold such money or property
in trust for the Collateral Agent, segregated from other funds of the Grantor, as
additional security for the Secured Obligations, except as otherwise permitted by
the Credit Agreement.

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5.4 Voting, etc.

Until the occurrence of an Event of Default, the Grantor shall be entitled to vote
any and all securities and to give consents, waivers or ratifications in respect
thereof; provided that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent with
any of the terms of the Credit Agreement or this deed or any other instrument or
agreement or document relating to the Secured Obligations (including any Loan
Document) or which would have the effect of materially impairing the position or
interests of the Collateral Agent. All such rights of the Grantor to vote and to
give consents, waivers and ratifications shall cease in case an Event of Default
shall occur and be continuing whereupon the Collateral Agent shall be entitled,
without limiting its other rights and remedies hereunder, to vote all or any part of
the securities whether or not transferred in the Collateral Agent’s name and give
all consents, waivers and ratifications in respect of the securities and otherwise
act with respect thereto as though it were the outright owner thereof.

5.5 Subsidiaries

The Grantor shall not, and shall not permit any of its Subsidiaries (to the extent
the Stock of such Subsidiary constitutes Collateral), without the consent of the
Collateral Agent, agree to any amendment of any Constituent Document that in any way
adversely affects the perfection or opposability of the security interest or
hypothecation or pledge of the Collateral Agent in, on or of the hypothecated
securities hypothecated by the Grantor hereunder or any election to turn any
previously uncertificated Stock that is part of the Pledged Collateral into
certificated Stock.

5.6 Standard of Care

The Collateral Agent shall not be:

	 	(a)	 	obliged to protest a security, or take steps or institute
proceedings to interrupt prescription or protect the securities against
depreciation or devaluation or make them productive;

	 	(b)	 	obliged to protect the Grantor against loss relating to a
security; or

	 	(c)	 	obliged to vote with respect to a security or a subscription,
conversion or other right pertaining thereto, or to any merger, consolidation,
reorganization, receiving order, bankruptcy, insolvency proceedings, compromise
or arrangement, or concerning the deposit of a security or otherwise, and shall
not be obliged to participate in or take any action in relation to such
matters, except where the Grantor has provided the Collateral Agent with
written instructions to do so and where, in the Collateral Agent’s opinion, the
security and the rights conferred hereunder
would not be thereby diminished, and upon payment of such indemnity or
remuneration as the Collateral Agent may require.

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6. POSSESSION OF PROPERTY

This deed creates a hypothec without delivery notwithstanding the undertakings contained in
Section 5.2 hereof.

7. DEFAULT

7.1 Events of Default

The Grantor shall be considered in default hereunder upon the occurrence of an Event
of Default under the Credit Agreement.

7.2 Effects

Without limiting its right, at any time and at its discretion, to demand payment of
any Secured Obligations payable on demand and without prejudice to any rights and
remedies which it has pursuant to agreements with the Grantor or at law (in
particular with respect to hypothecated claims), the Collateral Agent, upon the
occurrence of an Event of Default under the Credit Agreement, may demand immediate
and full payment of the amounts owing on account of the Secured Obligations, which
shall forthwith become due and payable, and exercise, at its discretion, without
restriction and without any prior notice other than such notices as are required by
law, any rights and remedies which it has pursuant to this deed or at law,
including, in particular, the following hypothecary rights:

	 	•	 	taking of possession for purposes of administration;

	 
	 	•	 	taking in payment;

	 
	 	•	 	sale by the Collateral Agent;

	 
	 	•	 	sale by judicial authority.

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7.3 Collateral Agent’s Rights

Irrespective of the particular remedy exercised by the Collateral Agent in the event
of a default hereunder, the following provisions shall apply in addition to any
provisions that may by law apply in the circumstances, the Grantor expressly
agreeing thereto:

	 	7.3.1	 	the Grantor undertakes to assemble and voluntarily surrender
the Hypothecated Property to the Collateral Agent upon request, at such place
or places as may be specified by the Collateral Agent, and agrees
not to put any impediment in the way of, but rather to facilitate by all
legal means, the exercise of the powers hereby granted to the Collateral
Agent and not to interfere therewith; in addition, the Collateral Agent
may, but shall not be obliged to, conduct a verification of the
Hypothecated Property, assemble or move any of such property or take
proceedings or do or take any act or action in relation to the
Hypothecated Property that it may deem advisable, the whole at the
Grantor’s expense. The Collateral Agent may take such steps as it
considers necessary or desirable to obtain possession of all or any part
of the Hypothecated Property and, to that end, the Grantor agrees that
the Collateral Agent, its servants or Collateral Agents or Receiver (as
hereinafter defined) may enter upon lands and premises where the
Hypothecated Property may be found for the purpose of taking possession
of and/or removing the Hypothecated Property or any part thereof. In the
event of the Collateral Agent taking possession of the Hypothecated
Property, or any part thereof, the Collateral Agent shall have the right
to maintain the same upon the premises on which the Hypothecated Property
may then be situated. The Collateral Agent may, in a reasonable manner,
take such action or do such things as to render any Hypothecated Property
unusable;

	 	7.3.2	 	the Collateral Agent may, in addition, at its discretion and
at the Grantor’s expense, whether after the Grantor has surrendered the
Hypothecated Property and until the Collateral Agent has exercised the
hypothecary right which it intends to exercise, or whether after the Collateral
Agent has chosen to take possession of the Hypothecated Property for purposes
of administration, use or operate all or any part of the Hypothecated Property
(without being obliged to make such property productive), change the
destination of or alienate such property by onerous title (except for
Hypothecated Property of little value) or charge such property with a hypothec
or other real right, enter into or renew any leases for such amounts and on
such terms and conditions as the Collateral Agent reasonably deems appropriate,
make any repairs or renovations or undertake or complete any work;

	 	7.3.3	 	the Collateral Agent may, in the exercise of its rights,
renounce any right belonging to the Grantor, even where no valuable
consideration is received;

	 	7.3.4	 	the Collateral Agent shall not be bound to make an inventory,
take out insurance or furnish other security to secure the performance of its
obligations;

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	 	7.3.5	 	the Collateral Agent may, at its discretion, take possession,
through its officers, agents or mandataries, of all or any part of the
Hypothecated Property, with full power to carry on, manage and conduct the
Grantor’s business; the Collateral Agent may use the Hypothecated
Property or any information that it obtains by reason of its
administration for its own benefit;

	 	7.3.6	 	the Grantor, through its officers and directors, shall
forthwith execute such documents and transfers as may be necessary to place the
Collateral Agent in legal possession of the Hypothecated Property and the
business of the Grantor in connection therewith, and thereupon all the powers,
functions, rights and privileges of each and every one of the directors and
officers of the Grantor shall cease and terminate with respect to the
Hypothecated Property;

	 	7.3.7	 	the Collateral Agent shall not be obliged to render an account
with respect to its actions in the exercise of its hypothecary rights, except
as stipulated by law. Should the Collateral Agent see fit to render an
account, it may do so in summary fashion;

	 	7.3.8	 	for the purpose of exercising any of its rights, the
Collateral Agent may make use of any premises on which the Hypothecated
Property is located, the whole at the Grantor’s expense;

	 	7.3.9	 	the Collateral Agent may, at its discretion, decide to sell
and dispose of the Hypothecated Property as a whole or in separate parcels, by
tender, public auction or private contract, on such date and on such terms and
conditions as the Collateral Agent may stipulate, after giving such prior
notices as are required by articles 2784 and following of the Civil Code of
Québec, and the Collateral Agent may make such sale for cash or credit upon
such reasonable conditions as to upset or reserve bid or price and as to terms
of payment as it may deem proper, and may rescind or vary any contract of sale
that may have been entered into and resell such property under any of the
powers conferred by this deed, adjourn any such sale from time to time and
execute and deliver to the purchaser or purchasers of the said property or any
part thereof good and sufficient deed or deeds for the same, the Grantor hereby
giving the Collateral Agent an irrevocable power of attorney for the purpose of
making such sale and executing such deeds, and any such sale made as aforesaid
shall be a perpetual bar in law and in equity against the Grantor and its
assigns and against any other persons who may claim the said property or any
part thereof from the Grantor or its assigns;

	 	7.3.10	 	the Collateral Agent, or its agents or representatives, may become purchasers
at any sale of the Hypothecated Property, whether made under the power of sale
herein contained or pursuant to foreclosure or other legal proceedings; and

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	 	7.3.11	 	the Collateral Agent may, in addition to any other rights it may have,
appoint by instrument in writing a receiver or receiver and manager (both of
which are herein called a “Receiver”) of all or any part of the Hypothecated
Property or may institute proceedings in any court of competent jurisdiction
for the appointment of such a Receiver. Any such Receiver is hereby given and
shall have the same powers and rights and exclusions and limitations of
liability as the Collateral Agent has under this deed or at law. In exercising
any such powers, any such Receiver shall, to the extent permitted by law, act
as and for all purposes shall be deemed to be the agent of the Grantor and the
Collateral Agent shall not be responsible for any act or default of any such
Receiver. The Collateral Agent may appoint one or more Receivers hereunder and
may remove any such Receiver or Receivers and appoint another or others in his
or their stead from time to time. Any Receiver so appointed may be an officer
or employee of the Collateral Agent. A court need not appoint, ratify the
appointment by the Collateral Agent of or otherwise supervise in any manner the
actions of any Receiver. Upon the Grantor receiving notice from the Collateral
Agent of the taking of possession of the Hypothecated Property or the
appointment of a Receiver, all powers, functions, rights and privileges of each
of the directors and officers of the Grantor with respect to the Hypothecated
Property shall cease, unless specifically continued by the written consent of
the Collateral Agent.

	 	7.3.12	 	In addition to any of Collateral Agent’s rights contained in this deed, the
Grantor does hereby agree with the Collateral Agent and the Secured Parties,
that the Collateral Agent shall have any other rights, remedies and powers
given to the Collateral Agent under Section 6 of the General Security
Agreement, inasmuch as applicable to the Grantor in the Province of Quebec, and
each such right, remedy and power is hereby incorporated by reference, mutatis
mutandis.

8. REPRESENTATIONS, WARRANTIES AND COVENANTS

8.1 Representations and Warranties

In addition to and not in substitution for any representation and warranty contained
in this deed, the Grantor does hereby represent and warrant to and in favour of the
Collateral Agent and the Secured Parties that each representation and warranty made
in the Credit Agreement and the General Security Agreement, inasmuch as applicable
to the Grantor, is hereby reiterated and restated by the Grantor and each such
representation and warranty is hereby incorporated by reference, mutatis mutandis,
and is hereby confirmed as true and correct as of the date hereof.

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8.2 Covenants and Agreements

In addition to and not in substitution for any covenant, agreement, undertaking and
condition contained in this deed, the Grantor does hereby covenant and agree with
the Collateral Agent and the Secured Parties, that it shall comply with, and ensure
the compliance of, all covenants, agreements, undertakings and conditions given
under the Credit Agreement and the General Security Agreement, inasmuch as
applicable to the Grantor, and each such covenant, agreement, undertaking and
condition is hereby incorporated by reference, mutatis mutandis.

8.3 Survival

All representations, warranties, covenants, agreements, undertakings and conditions
made in the Loan Documents, which, if not true, accurate and complete when made and
which, if not performed in accordance with the terms thereof, are material, shall be
considered to have been relied on by the Collateral Agent and the Secured Parties
and shall survive the execution and delivery of this deed or any investigation made
at any time by or on behalf of the Collateral Agent and any disposition or payment
of the Secured Obligations until repayment and performance in full of the Secured
Obligations and termination of all rights of the Grantor that, if exercised, would
result in the existence of Secured Obligations.

9. MISCELLANEOUS PROVISIONS

9.1 Nature of the Secured Obligations

Each of the Secured Obligations of the Grantor is indivisible.

9.2 Nullity of a Provision

In the event that any provision of this deed is declared null and void or is deemed
not to have been written, the other provisions of this deed shall be severable from
such provision and shall continue to have full force and effect.

9.3 Application of Payments

Any insurance indemnity, as well as any other amount or other property received by
the Collateral Agent in the exercise of the rights conferred upon it by this deed or
by law or in any other manner with respect to any of the Hypothecated Property, may
be retained by the Collateral Agent as Hypothecated Property or applied to the
payment of the Secured Obligations, whether or not they are due. Any amount
collected by the Collateral Agent, even on account of the voluntary performance of
the Secured Obligations, shall be applied in accordance with Section 2.13 of the
Credit Agreement.

Should any of the Hypothecated Property or its proceeds be in a currency different
from that of the Secured Obligations, the Collateral Agent is hereby
authorized to convert the amount or the claim in question into the currency of the
Secured Obligations at the Collateral Agent’s rate of exchange for the currencies
concerned on the date the payment is applied.

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

13

 

9.4 Rights Cumulative and Exercise of Remedies

The rights hereby created are in addition to and not in substitution for any other
right or security held by the Collateral Agent. The exercise by the Collateral
Agent of any of its rights and remedies shall not prevent it from exercising any
other right or remedy conferred upon it by this deed or any other security or by
law.

The Collateral Agent may, separately or successively, exercise the rights conferred
upon it by this deed on any part of the Hypothecated Property, without being obliged
to do so on the entire Hypothecated Property and without prejudice to its rights and
remedies with respect to the remaining Hypothecated Property, and it shall not be in
any way obliged to exercise its rights and remedies against any other person liable
for the Secured Obligations or to realize any other security securing the Secured
Obligations.

The Collateral Agent may delegate the exercise of its rights or the performance of
its obligations arising from this deed to another person upon written notice to the
Grantor and may in such case, subject to Section 11.19 (Confidentiality) of the
Credit Agreement, supply to such other person any information that it holds on the
Grantor or on the Hypothecated Property.

9.5 Amendments in Writing

None of the terms or provisions of this deed may be waived, amended, supplemented or
otherwise modified except in accordance with Section 11.1 (Amendments, Waivers,
Etc.) of the Credit Agreement; provided, however, that schedules to this Agreement
may be supplemented (but no existing provisions may be modified and no Collateral
may be released except as provided in Section 9.17 hereof) through amendments in a
form reasonably acceptable to the Collateral Agent, in each case duly executed by
the Collateral Agent and the Grantor.

9.6 Notices

All notices, requests and demands to or upon the Collateral Agent or the Grantor
hereunder shall be effected in the manner provided for in Section 11.8 (Notices,
Etc.) of the Credit Agreement; provided, however, that any such notice, request or
demand to or upon the Grantor shall be addressed to the Grantor’s registered office
as set forth herein.

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

14

 

9.7 Notice of Default

The mere expiry of the time limit for performing any of the Secured Obligations
shall serve to put the Grantor in default, without any notice or demand being
required for that purpose.

9.8 No Waiver by Course of Conduct; Cumulative Remedies

Neither the Collateral Agent nor any other Secured Party shall by any act (except by
a written instrument pursuant to Section 9.5 (Amendments in Writing)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure to
exercise, nor any delay in exercising, on the part of the Collateral Agent or any
other Secured Party, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. A waiver by the Collateral Agent or any other
Secured Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy that the Collateral Agent or such other
Secured Party would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

9.9 Successors and Assigns

This Agreement shall be binding upon the successors and assigns of the Grantor and
shall inure to the benefit of the Collateral Agent and each other Secured Party and
their successors and assigns; provided, however, that the Grantor may not assign,
transfer or delegate any of its rights or obligations under this Agreement without
the prior written consent of the Collateral Agent.

9.10 Power of Attorney

The Grantor hereby grants to the Collateral Agent and each of its officers, agents,
correspondents or mandataries, including any depositary or Receiver (as hereinafter
defined), an irrevocable power of attorney with full powers of substitution and
revocation, to do, make and execute, for the Grantor and in its name, all such
deeds, documents, transfers, assignments, hypothecs, assurances, consents and things
as the Collateral Agent may deem necessary or appropriate to be done, made or
executed by the Grantor to protect the Collateral Agent’s rights hereunder and/or
preserve the Hypothecated Property and to give effect to all the provisions of this
deed and the documents and other acts, matters and things that the Grantor has
agreed to do, make and execute or that may be required in the exercise of the powers
conferred upon the Collateral Agent by this deed, and in particular, without
limiting the generality of the foregoing, to endorse or transfer all or any part of
the securities, if any, included in the Hypothecated Property over to the Collateral
Agent or its officers, agents, correspondents or mandataries, including any
depositary, so that the Collateral Agent or its officers, agents, correspondents or
mandataries may be registered as sole owners of such
securities, and to obtain from any taxation authority at any time, if deemed useful,
any information necessary to allow the Collateral Agent to determine the amount of
the Grantor’s indebtedness to such taxation authorities. The Grantor also grants to
each of such persons holding its power of attorney the right to use its name
whenever they may deem it necessary or appropriate to do so for the purposes hereof
and the Grantor further ratifies and confirms, and undertakes to ratify and confirm,
all acts and actions done or taken by each of such persons in connection herewith.
Notwithstanding anything to the contrary in this paragraph, the Collateral Agent
agrees that it shall not exercise any right under the power of attorney provided for
in this paragraph unless an Event of Default shall be continuing.

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

15

 

9.11 Indemnification

The Grantor hereby agrees and undertakes to indemnify the Collateral Agent and the
other Secured Parties and save and hold it harmless from and against any and all
losses, expenses, costs and liabilities (including reasonable legal fees and
disbursements) that the Collateral Agent and the other Secured Parties or any of its
or their agents, mandataries or persons holding its or their power of attorney may
sustain or incur in the exercise of the powers and rights conferred upon the
Collateral Agent hereunder.

9.12 Interpretation

References herein to gender shall include all genders and the singular shall include
the plural and vice versa, as required by the context.

9.13 Further Assurances

The Grantor hereby agrees to do, make and execute, at its own expense, all such
deeds, documents and things as may be necessary or advisable, in the opinion of the
Collateral Agent’s legal counsel, to give effect to the provisions of this deed,
including without limiting the generality of the foregoing, in order that a valid
and enforceable hypothec be created and maintained on any property forming part of
the Hypothecated Property as of the execution of this deed or at any time in the
future.

9.14 Divisions and Titles

The division of this deed into sections, sections and subsections and the insertion
of titles are for ease of reference only and shall not influence its meaning or
construction.

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

16

 

9.15 Entire Agreement 

This deed, together with the other Loan Documents, represents the entire agreement
of the parties and supersedes all prior agreements and understandings relating to
the subject matter hereto concerning the Secured Obligations.

9.16 Applicable Law

This deed shall be governed and construed in accordance with the laws in force in
the Province of Quebec. It must also be interpreted so that any Hypothecated
Property located in another jurisdiction be affected by a valid security under the
applicable law of such other jurisdiction.

9.17 Release of Collateral

	 	(a)	 	At the time provided in Section 10.7(b)(i) of the Credit Agreement, the
Collateral shall be released from the Liens hereby and this deed and all obligations
(other than those expressly stated to survive such termination) of the Collateral Agent
and the Grantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall revert to
the Grantor. At the request and sole expense of the Grantor following any such
termination, the Collateral Agent shall deliver to the Grantor any Collateral of the
Grantor held by the Collateral Agent hereunder and execute and deliver to the Grantor,
at the sole expense of the Grantor, such documents as the Grantor shall reasonably
request to evidence such termination.

	 	(b)	 	If the Collateral Agent shall be directed or permitted pursuant to Section
10.7(b)(ii) or (iii) of the Credit Agreement to release any Lien created hereby upon
any Collateral (including any Collateral sold or disposed of by the Grantor in a
transaction permitted by the Credit Agreement), such Collateral shall be released from
the Lien created hereby to the extent provided under, and subject to the terms and
conditions set forth in, Section 10.7(b)(ii) or (iii) of the Credit Agreement. In
connection therewith but subject to the terms of the Credit Agreement, the Collateral
Agent, at the request and sole expense of the Grantor, shall execute and deliver to the
Grantor, all releases or other documents reasonably necessary or desirable for the
release of the Lien created hereby on such Collateral.

	 	(c)	 	At the request and sole expense of the Grantor, the Grantor shall be released
from its obligations hereunder in the event that all the capital stock of the Grantor
shall be so sold or disposed (but only so long as such sale or other disposition is
permitted under the Credit Agreement); provided, however, that the Grantor shall have
delivered to the Collateral Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the Grantor and the terms
of the sale or other disposition in reasonable detail, including the price thereof and
any expenses in connection therewith, together with a certification by the Grantor in
form and substance reasonably satisfactory to the Collateral Agent stating that such
transaction is in compliance with the Loan Documents.

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

17

 

9.18 Reinstatement

The Grantor further agrees that, if any payment made by any Loan Party or other
Person and applied to any of the Secured Obligations is at any time annulled,
avoided, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
Collateral are required to be returned by any Secured Party to such Loan Party or
other Person, its estate, trustee, receiver or any other party, including the
Grantor, under any bankruptcy law, provincial or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, any Lien or other
Collateral securing such liability shall be and remain in full force and effect, as
fully as if such payment had never been made or, if prior thereto the Lien granted
hereby or other Collateral securing such liability hereunder shall have been
released or terminated, such Lien or other Collateral shall be reinstated in full
force and effect, and such prior release or termination shall not diminish, release,
discharge, impair or otherwise affect any Lien or other Collateral securing the
obligations of the Grantor in respect of the amount of such payment.

9.19 Explanation of Contract

The Grantor confirms that the Collateral Agent has provided it with adequate
explanations concerning the nature and scope of this deed and that it has had an
opportunity to consult a lawyer, notary or other adviser in connection therewith.

9.20 Acknowledgement

The Grantor hereby acknowledges that it has received and taken cognizance of an
original executed copy of the Loan Documents and is familiar with all the provisions
thereof.

9.21 Precedence

Except as limited herein, in the event that any provisions of this deed contradict,
are inconsistent with and are otherwise incapable of being construed in conjunction
with the provisions of the Credit Agreement or the General Security Agreement, the
provisions of the Credit Agreement or the General Security Agreement, as applicable,
shall take precedence over those contained in this deed. Notwithstanding the
foregoing, in the event that granting of security interest provisions in the Credit
Agreement or the General Security Agreement contradict and are otherwise incapable
of being construed in conjunction with the provisions of this deed, such provisions
of this deed shall take precedence over those contained in the Credit Agreement or
the General Security Agreement.

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

18

 

9.22 Counterparts

This deed may be executed in any number of counterparts each of which when executed
and delivered is an original but all of which taken together constitute
one and the same instrument; any party may execute this deed by signing any
counterpart of it.

9.23 Language

The parties hereto confirm that it is their wish that this deed and all documents
relating thereto, including notices, be drawn up in the English language. Les
parties aux présentes confirment leur volonté que cet acte de même que tous
documents, y compris tous avis, s’y rapportant soient rédigés en langue anglaise.

[the remainder of this page is intentionally left blank]

[signature page follows]

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

19

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Deed of Hypothec at the
place and as of the date first above written.

	 	 	 	 	 
	 	4278941 CANADA INC.,

as Grantor

 	 
	 	Per:  	/s/ Denise Imperiale
 	 
	 	 	Name:  	Denise Imperiale 	 
	 	 	Title:  	Treasurer 	 
	 
	 	BANK OF AMERICA, N.A.,

as Collateral Agent

 	 
	 	Per:  	/s/ Kevin W. Corcoran
 	 
	 	 	Name:  	Kevin W. Corcoran 	 
	 	 	Title:  	Vice President 	 

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

 

 

Schedule “A”

Intellectual Property

Nil.

Deed of Hypothec — 4278941 Canada Inc. (2008)

 

 

 

Schedule “B”

Securities

	1.	 	196,000 common shares and 4,000 preferred shares of W.B.R. Industria e Comercio de
Vestuario S.A.

Deed of Hypothec — 4278941 Canada Inc. (2008)exv10w1

Exhibit 10.1

EXECUTION VERSION

 

THIRD AMENDMENT TO

CREDIT AGREEMENT

dated as of

August 5, 2010

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

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

as Syndication Agent,

and

BANK OF AMERICA, N.A.,

as Documentation Agent

 

J.P. MORGAN SECURITIES INC. and CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

Co-Lead Arrangers

 

 

 

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third Amendment”) dated as of August
5, 2010, 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

     A. 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 and that certain Second Amendment to Credit Agreement
dated as of September 30, 2009 (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.

     B. The Borrower has notified the Administrative Agent that it plans to issue up to
$200,000,000 of new Debt the proceeds of which new Debt shall be used to prepay the Senior Notes
and for general corporate purposes. The Borrower has provided to the Administrative Agent a copy
of the preliminary prospectus supplement with respect to the proposed issuance of such new Debt
(the “Senior Notes Refinancing Debt Preliminary Prospectus Supplement”).

     C. The Borrower has requested that certain provisions of the Credit Agreement be amended in
order to accommodate the foregoing transaction, and the Required Lenders have agreed to such
amendments.

     D. 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 Third 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 and the Third Amendment, as the same may from time
to time be further amended, modified, supplemented or restated.

          (b) The definition of “Permitted Refinancing Debt” is hereby amended by restating
clause (a) thereof as follows:

 

 

“(a) such new Debt (i) if such new Debt refinances the Senior Notes and is
issued on or before May 15, 2011, is in an aggregate principal amount not in
excess of $200,000,000, or (ii) otherwise, is in an aggregate principal
amount not in excess of the sum of (x) the aggregate principal amount then
outstanding of the Refinanced Debt (or, if the Refinanced Debt is exchanged
or acquired for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration thereof, such lesser amount)
and (y) an amount necessary to pay any fees and expenses including premiums,
related to such exchange or refinancing;”

(c) The definition of “Third Amendment” is hereby added where alphabetically
appropriate to read as follows:

     “Third Amendment” means the Third Amendment to Credit Agreement dated
as of August 5, 2010 among the Parent, the Borrower, the Administrative Agent and
the Lenders party thereto.

     2.2 Amendment to Section 3.04(c). Section 3.04(c)(ii) is hereby amended and restated
as follows:

“(ii) Upon any redetermination of or adjustment to the amount of the
Borrowing Base in accordance with Section 2.07 or Section 8.13(c), if the
total Revolving Credit Exposures exceeds the redetermined or adjusted
Borrowing Base, then the Borrower shall (A) prepay the Borrowings in an
aggregate principal amount equal to such excess, (B) within 60 days of such
redetermination or adjustment, provide Engineering Reports on additional Oil
and Gas Properties not evaluated in the most recent Reserve Report having a
loan value, as determined by the Required Lenders, equal to at least such
deficiency, and (C) if any excess remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.08(j). The Borrower shall be obligated
to make such prepayment and/or deposit of cash collateral pursuant to clause
(A) or (C) above in three (3) successive installments, each in an amount
equal to one-third of such excess, due 60, 90 and 120 days, respectively,
from the date of its receipt of the New Borrowing Base Notice; provided that
all payments required to be made pursuant to this Section 3.04(c)(ii) must
be made on or prior to the Termination Date.”

     2.3 Amendment to Section 8.14(a). Section 8.14(a) is hereby amended and restated as
follows:

“(a) In connection with each redetermination of the Borrowing Base, the
Borrower shall review the Reserve Report and the list of current Mortgaged
Properties (as described in Section 8.12(c)(vi)) to ascertain

2

 

whether the Mortgaged Properties represent at least 85% of the total value
of the Oil and Gas Properties evaluated in the most recently completed
Reserve Report after giving effect to exploration and production activities,
acquisitions, dispositions and production. In the event that the Mortgaged
Properties do not represent at least 85% of such total value, then the
Borrower shall, and shall cause the Borrower’s Subsidiaries to, grant,
within thirty (30) days of delivery of the certificate required under
Section 8.12(c) or on the date of the delivery of the additional Engineering
Reports under Section 3.04(c)(ii)(B), to the Administrative Agent as
security for the Indebtedness a first-priority Lien interest (provided that
Excepted Liens of the type described in clauses (a) to (d) and (f) of the
definition thereof may exist, but subject to the provisos at the end of such
definition) on additional Oil and Gas Properties not already subject to a
Lien of the Security Instruments such that after giving effect thereto, the
Mortgaged Properties will represent at least 85% of such total value. All
such Liens will be created and perfected by and in accordance with the
provisions of deeds of trust, security agreements and financing statements
or other Security Instruments, all in form and substance reasonably
satisfactory to the Administrative Agent and in sufficient executed (and
acknowledged where necessary or appropriate) counterparts for recording
purposes.”

     2.4 Amendment to Section 9.01(a). Section 9.01(a) is hereby amended by adding the
following proviso at the end thereof:

“ provided that, upon the issuance of any Permitted
Refinancing Debt regarding the Senior Notes, the Senior Notes shall be
excluded from the calculation of Total Debt, for purposes of calculating the
financial ratio under this Section 9.01(a), for a period of sixty (60) days
from and after the date of such issuance.”

     2.5 Amendment to Section 9.04(b). Section 9.04(b) is hereby amended and restated as
follows:

“Redemption of Senior Notes; Amendment of Senior Indenture. The
Parent will not, and will not permit any of its Subsidiaries to, prior to
the date that is ninety-one (91) days after the Maturity Date: (i) call,
make or offer to make any optional or voluntary Redemption of or otherwise
optionally or voluntarily Redeem (whether in whole or in part) the Senior
Notes or any Permitted Refinancing Debt in respect thereof; provided
that the Borrower and/or the Parent may prepay the Senior Notes with the
proceeds of any Permitted Refinancing Debt or with the net cash proceeds of
any sale of Equity Interests (other than Disqualified Capital Stock) of the
Parent, including any repayment by a call of such Senior Notes prior to May
15, 2011, following the completion of a tender offer which is substantially
concurrent with the incurrence of such Permitted Refinancing Debt; or (ii)
amend, modify, waive or otherwise change, consent or agree to any amendment,
modification, waiver or other change to, any of the

3

 

terms of the Senior Notes, any Permitted Refinancing Debt or the Senior
Indenture if the effect thereof would be to shorten its maturity or average
life or increase the amount of any payment of principal thereof or increase
the rate or shorten any period for payment of interest thereon.”

Section 3. Acknowledgments. The Administrative Agent hereby agrees and acknowledges that
pursuant to clause (e) of the proviso in the definition of the term “Permitted Refinancing Debt,”
the terms and documentation described in the Senior Notes Refinancing Debt Preliminary Prospectus
Supplement are satisfactory to the Administrative Agent. The Lenders hereby acknowledge and agree
that as provided in the proviso in the definition of the term “Maturity Date,” upon the prepayment
of the Senior Notes with the proceeds of Permitted Refinancing Debt, in accordance with the terms
of the Credit Agreement, as amended hereby, the Maturity Date shall be October 2, 2013.

Section 4. Conditions Precedent. This Third Amendment shall not become effective until 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
Third Amendment signed on behalf of such Persons.

     The Administrative Agent is hereby authorized and directed to declare this Third 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. Such declaration
shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.

Section 5. Miscellaneous.

     5.1 Confirmation. The provisions of the Credit Agreement, as amended by this Third
Amendment, shall remain in full force and effect following the effectiveness of this Third
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 Third 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.

     5.3 Loan Document. This Third 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.

4

 

     5.4 Counterparts. This Third 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 Third Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart hereof.

     5.5 NO ORAL AGREEMENT. THIS THIRD 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 THIRD 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 THIRD 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 Third
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 Third 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 Third Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

[SIGNATURES BEGIN NEXT PAGE]

5

 

     IN WITNESS WHEREOF, the parties hereto have caused this Third 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 Third Amendment

 

 

	 	 	 	 	 
	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 	 
	 	 	Name:  	Jo Linda Papadakis 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Third Amendment

 

 

	 	 	 	 	 
	LENDER: 	CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

 	 
	 	By:  	/s/ Tom Byargeen 	 
	 	 	Name:  	Tom Byargeen 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	/s/ Sharada Manne
 	 
	 	 	Name:  	Sharada Manne 	 
	 	 	Title:  	Director 	 
	 

Signature Page to Third Amendment

 

 

	 	 	 	 	 
	LENDER 	BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Sandra M. Serie 	 
	 	 	Name:  	Sandra M. Serie 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Third Amendment

 

 

	 	 	 	 	 
	LENDER: 	WELLS FARGO BANK, N.A.

 	 
	 	By:  	/s/
Scott Hodges 	 
	 	 	Name:  	Scott Hodges	 
	 	 	Title:  	Director	 
	 

Signature Page to Third Amendment

 

 

	 	 	 	 	 
	LENDER: 	WHITNEY NATIONAL BANK

 	 
	 	By:  	/s/
John B. Lane	 
	 	 	Name:  	John B. Lane	 
	 	 	Title:  	Senior Vice President	 
	 

Signature Page to Third Amendment

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