EXHIBIT 10.2
SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the
"Amendment") is made and entered into effective as of December 23, 2003, by and
among PETROQUEST ENERGY, L.L.C., a Louisiana limited liability company
("Borrower"); PETROQUEST ENERGY, INC., a Delaware corporation ("Guarantor");
BANK ONE, NA, a national banking association, (individually as a lender and as
agent, "Bank One").
R E C I T A L S:
WHEREAS, Borrower, Guarantor, Bank One and Union Bank of California
entered into an Amended and Restated Credit Agreement dated May 14, 2003 (which
as the same may be amended from time to time is herein called the "Credit
Agreement"), pursuant to which Borrower amended and restated a previously
existing credit facility dated May 11, 2001; and
WHEREAS, Union Bank of California has, by Assignment of even date
herewith, assigned and conveyed to Bank One all of its interest in the Credit
Agreement; and
WHEREAS, Borrower, Guarantor and Bank One desire to amend the Credit
Agreement as herein set forth.
NOW THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Except as otherwise provided below, unless the
context hereof indicates otherwise, all capitalized terms used herein shall have
the same meaning as such capitalized terms are defined in the Credit Agreement.
(a) Definitions. Article I of the Credit Agreement is
hereby amended by adding the following new defined terms and their
definitions in proper alphabetical sequence as follows:
"Acquisition Agreement" means that certain Purchase and Sale Agreement
dated December 22, 2003, among Borrower, Guarantor, Carthage, and
▇▇▇▇▇▇▇▇▇, regarding the purchase by Borrower of Oil & Gas Properties
in the Carthage Field located in Panola County, Texas."
"▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇▇ Exploration, L.L.C., a Kentucky limited
liability company"
"Carthage" means Carthage, LLC, a Kentucky limited liability company"
(b) Definitions. The following defined terms set forth in
Article I of the Credit Agreement are hereby amended as follows:
"Borrowing Base Reduction Amount" means (a) for each
month commencing March 1, 2004 until the next semi-annual
Borrowing Base redetermination pursuant to Section 2.2.2,
$1,000,000, and (b) for each month thereafter, such amount as
designated by 100% of the Lenders from time to time in
connection with each successive scheduled semi-annual
Borrowing Base redetermination pursuant to Section 2.2.2 or
successive unscheduled Borrowing Base redetermination pursuant
to Section 2.2.3.; provided however, if the Required Lenders
fail to timely designate a new Borrowing Base Reduction
Amount, then the Borrowing Base Reduction Amount most recently
in effect will continue in effect until the Required Lenders
designate a new Borrowing Base Reduction Amount."
"Unutilized Availability" means an amount equal to
the sum of (i) the Borrowing Base in effect from time to time;
and (ii) the amount available for borrowing by Borrower under
the Subordinated Credit Agreement, minus the Aggregate
Outstanding Debt."
2. Amendments to the Credit Agreement. The Credit Agreement is,
effective the date hereof, and subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, hereby amended as follows:
(a) Section 2.2.1 Borrowing Base, of the Credit Agreement
is hereby amended by deleting the section in its entirety and substituting the
following:
"2.2.1 During the period from the date of this
Agreement to the date as of which the Borrowing Base is first
redetermined pursuant to Section 2.2.2, the Borrowing Base shall be
$20,200,000.00."
(b) A new Section 5.29 Acquisition Agreement is hereby
added to the Credit Agreement as follows:
"5.29 Acquisition Agreement. The transactions contemplated
by the Acquisition Agreement have or will close as contemplated therein
and neither Borrower, Guarantor, Carthage nor ▇▇▇▇▇▇▇▇▇ has waived nor
shall waive, or in any way amend, without the prior consent of the
Agent, the terms of the Acquisition Agreement, including any condition
to the obligations to close as so set forth therein. A true, correct
and complete copy of the Acquisition Agreement (including all exhibits,
schedules and amendments thereto) has been delivered to Agent and a
true, correct and complete copy of each document and instrument
delivered at closing of the Acquisition will be delivered to the Agent
on the closing date thereof. Neither Carthage nor ▇▇▇▇▇▇▇▇▇ is in
default under the Acquisition Agreement or any document or instrument
to be delivered in connection with the Acquisition Agreement executed
in connection therewith. The representations and warranties made by
Carthage and/ or ▇▇▇▇▇▇▇▇▇ in the Acquisition Agreement and any other
document or instrument will be true and correct (except for changes
expressly provided for therein or herein) on and as of the closing date
as though made on and as of such date."
Section 6.31.4 to the Credit Agreement is hereby
deleted in its entirety.
(d) Section 6.32 to the Credit Agreement is hereby
amended to read as follows:
"6.32. Subordinated Indebtedness. The Borrower will
promptly provide the Agent with copies of all documentation,
notices and reports provided by or on behalf of the Borrower,
Guarantor or any Subsidiary to the Subordinated Lenders. On or
before the tenth (10th) day of each calendar month, the
Borrower shall deliver to the Agent a certificate, executed by
an Authorized Officer of the Borrower, setting forth the
outstanding balance of the Subordinated Indebtedness as of the
last day of the preceding month. The Borrower will not, and
will not permit the Guarantor or any Subsidiary to, make any
(i) payments on the principal amount of any Subordinated
Indebtedness; (ii) payments of interest on the Subordinated
Indebtedness after the occurrence of a Unmatured Default or a
Default; (iii) amendment or modification to the Subordinated
Credit Agreement or any other agreement evidencing or
governing any Subordinated Indebtedness without the prior
written consent of the Agent; or (iv) directly or indirectly
voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any portion of the
Subordinated Indebtedness without the prior written consent of
the Agent."
3. Conditions Precedent to Effectiveness of Amendment. This
Amendment shall become effective when, and only when, the Agent and Lenders
shall have received counterparts of this Amendment executed by Borrower and
Guarantor and Section 2 hereof shall become effective when, and only when, the
Agent and Lenders shall have additionally received all of the following
documents, each document (unless otherwise indicated) being dated the date of
receipt thereof by Lender (which date shall be the same for all such documents),
in form and substance satisfactory to the Lender:
(a) Counterparts of this Amendment duly executed by
Borrower, Guarantor and Lenders;
(b) A copy of the resolutions approving this Amendment,
and authorizing the transactions contemplated herein or therein duly
adopted by the Managers of Borrower, accompanied by a certificate of
the duly authorized Secretary of Borrower, that such copy is a true and
correct copy of the resolutions duly adopted by the Managers of
Borrower, and that such resolutions constitute all the resolutions
adopted with respect to such transactions, and have not been amended,
modified or revoked in any respect and are in full force and effect as
of the date hereof;
(c) A copy of the resolutions approving this Amendment,
and authorizing the transactions contemplated herein or therein duly
adopted by the Board of Directors of Guarantor, accompanied by a
certificate of the duly authorized Secretary of Guarantor, that such
copy is a true and correct copy of the resolutions duly adopted by the
Board of Directors of Guarantor, and that such resolutions constitute
all the resolutions adopted with respect to such transactions, and have
not been amended, modified or revoked in any respect and are in full
force and effect as of the date hereof;
(d) A certificate, executed by an Authorized Officer of
Borrower and Guarantor, stating that attached thereto is a true,
correct and complete copy of a fully executed counterpart of the
Acquisition Agreement, all exhibits and schedules thereto and all other
documents and instruments executed and delivered in connection
therewith. Additionally, the Acquisition Agreement shall expressly
permit the direct or indirect assignment (collateral or otherwise) to
the Lenders of all of the rights, but none of the obligations of
Borrower, as a purchaser, under the Acquisition Agreement;
(e) Mortgages, executed by the Borrower, in a form
satisfactory to the Agent, the Lenders and their counsel with respect
to the Properties purchased by Borrower pursuant to the Acquisition
Agreement and described therein, which are part of the Collateral, and
such other agreements, documents and instruments as may be necessary
and appropriate, in form and substance satisfactory to the Agent and
the Lenders, executed and delivered by the Borrower, as mortgagor or
assignor, in favor of the Agent, ratably for the benefit of the
Lenders, in order to create and perfect the Lender Liens in and to all
Collateral described therein;
(f) There shall not have been, in the sole judgment of
Lenders, any material adverse change in the financial condition,
business or operations of Borrower or Guarantor;
(g) Payment by Borrower of the fees and expenses of
counsel to Lenders in connection with the preparation and negotiation
of this Amendment and all documents and instruments contemplated
hereby;
(h) The legal opinion of counsel to Borrower and
Guarantor, in form and substance satisfactory to the Agent and its
counsel;
(i) ISDA documents entered into between Borrower and any
of the Lenders evidencing Rate Management Transactions with respect to
the Oil and Gas Properties of the Borrower and Guarantor, with
confirmations of the transactions thereunder providing satisfactory
hedging of natural gas sales in amounts and at prices satisfactory to
the Lenders from the date hereof through December, 2005;
(j) The execution and delivery of such additional
documents and instruments which the Agent and its counsel may deem
necessary to effectuate this Amendment or any document executed and
delivered to Lenders in connection herewith or therewith.
4. Representations and Warranties of Borrower. Borrower
represents and warrants as follows:
(a) Borrower and Guarantor are each duly authorized and
empowered to execute, deliver and perform this Amendment and all other
instruments referred to or mentioned herein to which it is a party, and
all action on its part requisite for the due execution, delivery and
the performance of this Amendment has been duly and effectively taken.
This Amendment, when executed and delivered, will constitute valid and
binding obligations of Borrower and Guarantor, as the case may be,
enforceable against such party in accordance
with its terms. This Amendment does not violate any provisions of the
Articles of Organization or limited liability agreement of Borrower,
the Certificate of Incorporation or By-Laws of Guarantor, or any
contract, agreement, law or regulation to which either Borrower or
Guarantor is subject, and does not require the consent or approval of
any regulatory authority or governmental body of the United States or
any state;
(b) After giving affect to this Amendment, the
representations and warranties contained in the Credit Agreement, as
amended hereby, and any other Loan Documents executed in connection
herewith or therewith are true, correct and complete on and as of the
date hereof as though made on and as of the date hereof;
(c) After giving affect to this Amendment, no event has
occurred and is continuing which constitutes a Default or Unmatured
Default; and
(d) When duly executed and delivered, each of this
Amendment and the Credit Agreement will be legal and binding
obligations of Borrower, enforceable in accordance with their
respective terms, except as limited by bankruptcy, insolvency or
similar laws of general application relating to the enforcement of
creditors' rights and by equitable principles of general application.
5. Reference to and Effect on the Loan Documents.
(a) Upon the effectiveness of Section 2 hereof, on and
after the date hereof, each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words of like import,
and each reference in the Loan Documents shall mean and be a reference
to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit
Agreement and the Note(s), and all other instruments securing or
guaranteeing Borrower's obligations to Lenders, including the
Collateral Documents, as amended (collectively, the "Security
Instruments") shall remain in full force and effect and are hereby
ratified and confirmed. Without limiting the generality of the
foregoing, the Security Instruments and all collateral described
therein do and shall continue to secure the payment of all obligations
of Borrower and Guarantor under the Credit Agreement and the Note(s),
as amended hereby, and under the other Security Instruments.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of Lender under any of the
Security Instruments, nor constitute a waiver of any provision of any
of the Security Instruments.
6. Waiver. As additional consideration for the execution,
delivery and performance of this Amendment by the parties hereto and to induce
Lenders to enter into this Amendment, Borrower and Guarantor each warrants and
represents to Lenders 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 Lenders or any defense to
(i) the payment of any obligations and indebtedness under the Note(s) and/or the
Security Instruments, or (ii) the performance of any of its obligations with
respect to the Note(s) and/or the Security Instruments, and in the event any
such facts, events, statuses or conditions exist or have existed, Borrower
unconditionally and irrevocably waives any and all claims and causes of action
against Lenders and any defenses to its payment and performance obligations in
respect to the Note(s) and the Security Instruments.
7. Costs and Expenses. Borrower agrees to pay on demand all costs
and expenses of Lenders in connection with the preparation, reproduction,
execution and delivery of this Amendment and the other instruments and documents
to be delivered hereunder, including the reasonable fees and out-of-pocket
expenses of counsel for Lenders. In addition, Borrower shall pay any and all
fees payable or determined to be payable in connection with the execution and
delivery, filing or recording of this Amendment and the other instruments and
documents to be delivered hereunder, and agrees to save Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay such fees.
8. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
9. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.
10. Final Agreement. THIS WRITTEN AMENDMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed in multiple counterparts, each of which is an original
instrument for all purposes, all as of the day and year first above written.
"BORROWER"
PETROQUEST ENERGY, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Financial Officer
"GUARANTOR"
PETROQUEST ENERGY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Financial Officer
"LENDERS"
BANK ONE, NA,
As the Agent, a Lender and LC Issuer
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Director
