Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Forbearance Agreement under Multidraw Term Loan Agreement
As previously disclosed, effective as of September 14, 2018, PetroQuest Energy, Inc. (the “
Company
”) and certain of its subsidiaries entered into a Forbearance Agreement (as amended, the “
Loan Forbearance Agreement
”) with Wells Fargo Bank, N.A., as administrative agent (the “
Agent
”) for the lenders party thereto from time to time (the “
Lenders
”), and the Lenders, with respect to the Multidraw Term Loan Agreement dated as of August 31, 2018 (as amended, supplemented, or modified from time to time, the “
Loan Agreement
”). Pursuant to the Loan Forbearance Agreement, the Agent and the Lenders agreed to forbear from taking any action with respect to certain anticipated events of default occurring under the Loan Agreement as a result of the non-payment by the Company of interest with respect to the Company’s 10% Second Lien Secured Senior Notes due 2021 (the “
2021 Notes
”) and the Company’s 10% Second Lien Senior Secured PIK Notes due 2021 (the “
2021 PIK Notes
” and together with the 2021 Notes, the “
Notes
”) when due and payable on August 15, 2018 and such non-payment continuing for a period of 30 days, under the Indentures (as defined below) governing the Notes.
On October 19, 2018, the Company and certain of its subsidiaries, the Agent and the Lenders entered into a third amendment to the Loan Forbearance Agreement that, among other things, extended the effectiveness of the forbearance under Loan Forbearance Agreement until the earlier to occur of (i) 11:59 p.m. Eastern time on October 31, 2018 or (ii) the occurrence of any specified forbearance default, which includes, among other things, any event of default under the Loan Agreement other than the anticipated events of default or a breach by the Company or certain of its subsidiaries of the Loan Forbearance Agreement.
The foregoing description of the third amendment to the Loan Forbearance Agreement is not complete and is qualified in its entirety by reference to the complete document, which is attached hereto as Exhibit 10.1 to this Form 8-K, and is incorporated herein by reference.
Amendments to Forbearance Agreements under 2021 Notes and 2021 PIK Notes Indentures
As previously disclosed, effective as of September 14, 2018, the Company and certain of its subsidiaries entered into (i) a Forbearance Agreement (as amended, the “
2021 Notes Forbearance Agreement
”) with certain holders (the “
2021 Notes Supporting Holders
”) of approximately $7,343,000 in aggregate principal amount (representing approximately 77.9% of the outstanding principal amount) of the 2021 Notes issued pursuant to the Indenture (as amended, supplemented, or modified from time to time, the “
2021 Notes Indenture
”), dated as of February 17, 2016, by and among the Company, the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral trustee, and (ii) a Forbearance Agreement (as amended, the “
2021 PIK Notes Forbearance Agreement
” and together with the 2021 Notes Forbearance Agreement, the “
Notes Forbearance Agreements
”) with certain holders (the “
2021 PIK Notes Supporting Holders
” and together with the 2021 Notes Supporting Holders, the “
Supporting Holders
”) of approximately $194,559,842 in aggregate principal amount (representing approximately 70.7% of the outstanding principal amount) of the 2021 PIK Notes issued pursuant to the Indenture (as amended, supplemented, or modified from time to time, the “
2021 PIK Notes Indenture
” and together with the 2021 Notes Indenture, the “
Indentures
”), dated as of September 27, 2016, by and among the Company, the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral trustee. Pursuant to the Notes Forbearance Agreements, the Supporting Holders have agreed to forbear from exercising their rights and remedies under the Indentures or the related security documents with respect to certain anticipated events of default occurring under the Indentures as a result
of the non-payment by the Company of interest with respect to the Notes when due and payable on August 15, 2018 and such non-payment continuing for a period of 30 days.
On October 19, 2018, the Company and certain of its subsidiaries, and the Supporting Holders entered into third amendments to the Notes Forbearance Agreements that, among other things, extended the effectiveness of the forbearance under the Notes Forbearance Agreements until the earlier of (i) 11:59 p.m. Eastern time on October 31, 2018 and (ii) the date the Notes Forbearance Agreements otherwise terminate in accordance with the terms therein. Pursuant to the Notes Forbearance Agreements, the Supporting Holders have agreed to not deliver any notice or instruction in respect of the exercise of any of the rights and remedies otherwise available under the Indenture or the related security documents with respect to such anticipated events of default. The Supporting Holders have also agreed to not transfer any ownership in the Notes held by any of the Supporting Holders during the Forbearance Period other than to potential transferees currently parties to, or who agree in writing to be bound by, the Notes Forbearance Agreements.
The foregoing descriptions of the amendment to the 2021 Notes Forbearance Agreement and the amendment to the 2021 PIK Notes Forbearance Agreement are not complete and are qualified in their entirety by reference to the complete documents, which are attached hereto as Exhibits 10.2 and 10.3, respectively, to this Form 8-K, and are incorporated herein by reference.