Exhibit 10.3

July 15, 2010        

GeoMet, Inc.

909 Fannin

Suite 1850

Houston, TX 77002

Attention: Steve Smith

 

  Re: Third Amended and Restated Credit Agreement dated June 9, 2006 (as amended
and supplemented from time to time, the “Existing Credit Agreement”) among
GeoMet, Inc. (“Borrower”), Bank of America, N.A., as Administrative Agent
(“Administrative Agent”), and the lenders party thereto on the date hereof (the
“Existing Banks”). Unless otherwise defined herein, all capitalized terms used
herein which are defined in the Existing Credit Agreement shall have the meaning
given such terms in the Existing Credit Agreement.

Ladies and Gentlemen:

1. Extension Request. Borrower, Administrative Agent and the Existing Banks have
entered into that certain Fourth Amended and Restated Credit Agreement dated
June 3, 2010 (as amended, the “Fourth A&R Credit Agreement”). The Fourth A&R
Credit Agreement provides that in order for such agreement to become effective
the completion of the conditions precedent set forth in Section 6.1 of the
Fourth A&R Credit Agreement, including, without limitation, the condition that
the issuance of the Convertible Preferred Equity (as defined in the Fourth A&R
Credit Agreement) has occurred and the net proceeds thereof have been used to
repay obligations owing under the Existing Credit Agreement, must be satisfied
on or prior to August 16, 2010 (the “CP Deadline”). By separate letter agreement
on even date herewith Borrower has requested that the CP Deadline be extended to
October 1, 2010. Prior to the effectiveness of the Fourth A&R Credit Agreement,
the Existing Credit Agreement remains in full force and effect and pursuant to
that certain Letter Agreement to Third Amended and Restated Credit Agreement
dated June 3, 2010 by and among Borrower, Administrative Agent and the Existing
Banks, the Existing Banks agreed not to exercise their right of assignment under
Section 14.8(c) of the Existing Credit Agreement or otherwise until the earlier
of the Effective Date (as defined in the Fourth A&R Credit Agreement) and
August 16, 2010

In connection with the extension of the CP Deadline, Borrower hereby requests
that the Existing Banks agree to extend (a) the Termination Date to October 1,
2011 and (b) the suspension of any assignments under Section 14.8(c) of the
Existing Credit Agreement until October 1, 2010.

2. Amendment to Existing Credit Agreement. For and in consideration of the
mutual covenants and agreements herein contained and other good and valuable
consideration, and in reliance on the representations, warranties covenants and
agreements contained in this letter agreement (this “Letter Agreement”), but
subject to the satisfaction of each condition precedent set forth in Paragraph 3
hereof, Administrative Agent, the Banks and Borrower hereby agree that (a) the
definition of Termination Date shall be amended to replace the reference to “May
6, 2011” set forth therein with a reference to “October 1, 2011”, (b) between
July 15, 2010 and the earlier of (i) October 1, 2010, (ii) the Effective Date
(as defined in the Fourth A&R Credit Agreement) and (iii) the date of any press
release or other public disclosure by Borrower that it has abandoned or
terminated the issuance of the Convertible Preferred Equity (as defined in the
Fourth A&R Credit Agreement), no Existing Bank may assign all or any portion of
its rights and obligations under the Loan Papers without the prior written
consent of Administrative Agent and Borrower; provided, that no consent or
approval shall be required from Administrative Agent or Borrower, respectively,
to give effect to a pledge or assignment by any Existing Bank of a security
interest in all or any portion of the rights of such Existing Bank under the
Existing Credit Agreement to the Federal Reserve Bank or any other similar
Governmental Authority, and (c) the Scheduled Determination Date set for
June 15, 2010 shall be extended to October 15, 2010.

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GeoMet, Inc.

July 15, 2010

Page 2

3. Conditions Precedent to Effectiveness. This Letter Agreement shall be
effective as of the date when the following conditions precedent have been
satisfied:

 

  (a) The requisite shareholders of Borrower, as required by Borrower’s
governing documents, have approved on or before July 31, 2010 the issuance of
the Convertible Preferred Equity (as defined in the Fourth A&R Credit
Agreement);

 

  (b) Administrative Agent shall have received counterparts of this Letter
Agreement executed on behalf of Borrower and each Bank;

 

  (c) Administrative Agent shall have received an executed legal opinion from
Thompson & Knight L.L.P. as counsel to the Credit Parties with respect to this
Letter Agreement, such legal opinion to be in form and substance reasonably
satisfactory to the Administrative Agent; and

 

  (d) No Default or Event of Default shall have occurred which is continuing and
no Borrowing Base Deficiency shall exist.

4. Miscellaneous.

 

  (a) Borrower hereby represents and warrants that as of the date of this Letter
Agreement, (i) no Default or Event of Default has occurred which is continuing,
(ii) no Borrowing Base Deficiency exists, and (iii) neither Borrower nor any
other Credit Party has any defense to (A) the obligation to pay the Obligations
when due, or (B) the validity, enforceability or binding effect against Borrower
or any other Credit Party of the Existing Credit Agreement or any of the other
Loan Papers (to the extent a party thereto) or any Liens intended to be created
thereby.

 

  (b) Borrower hereby represents and warrants that each representation and
warranty of Borrower and the other Credit Parties contained in the Existing
Credit Agreement and each of the other Loan Papers is true and correct on the
date hereof.

 

  (c) Borrower hereby agrees to pay on demand all reasonable fees and expenses
of counsel to Administrative Agent incurred by Administrative Agent in
connection with the preparation, negotiation and execution of this Letter
Agreement and all related documents.

 

  (d) This Letter Agreement may be executed in counterparts, and all parties
need not execute the same counterpart. Facsimiles shall be effective as
originals.

 

  (e) THIS LETTER AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

  (f) This Letter Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.

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GeoMet, Inc.

July 15, 2010

Page 3

 

  (g) This Letter Agreement constitutes a “Loan Paper” under and as defined in
the Existing Credit Agreement.

 

  (h) Nothing contained in this Letter Agreement shall be deemed a consent,
waiver or extension of any other action or inaction of Borrower other than as
expressly provided in Section 1 hereof. No Bank nor Administrative Agent shall
be obligated to grant any future waiver, consent, extension or amendment with
respect to the Existing Credit Agreement or any other Loan Paper.

If you are in agreement with the foregoing, please execute this Letter Agreement
in the space provided below and return an executed counterpart of this Letter
Agreement to Vinson & Elkins LLP, counsel to Administrative Agent, at 2001 Ross
Avenue, Suite 3700, Dallas, Texas 75201, Attention: Jason McInnes (phone
214.220.7783; fax 214.999.7783).

[Signature Page Follows]

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Very truly yours,

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

/s/ Renita M. Cummings

  Renita M. Cummings   Assistant Vice President

SIGNATURE PAGE TO LETTER AGREEMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

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Accepted and Agreed

as of July 15, 2010

BORROWER:

GEOMET, INC.,

a Delaware Corporation

 

By:  

/s/ William C. Rankin

Name:  

William C. Rankin

Title:  

EVP & CFO

SIGNATURE PAGE TO LETTER AGREEMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

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BANKS:     BANK OF AMERICA, N.A.     By:  

/s/ Jeffrey H. Rathkamp

      Jeffrey H. Rathkamp       Managing Director

SIGNATURE PAGE TO LETTER AGREEMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

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BNP PARIBAS By:  

/s/ Polly Schott

Name:  

Polly Schott

Title:  

Director

By:  

/s/ Edward Pak

Name:  

Edward Pak

Title:  

Vice President

SIGNATURE PAGE TO LETTER AGREEMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

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BANK OF SCOTLAND By:  

/s/ Julia R. Franklin

Name:  

Julia R. Franklin

Title:  

Assistant Vice President

SIGNATURE PAGE TO LETTER AGREEMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

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U.S. BANK NATIONAL ASSOCIATION By:  

/s/ John C. Lozano

Name:  

John C. Lozano

Title:  

Vice President

SIGNATURE PAGE TO LETTER AGREEMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

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STERLING BANK By:  

/s/ David W. Phillips

Name:  

David W. Phillips

Title:  

Senior Vice President

SIGNATURE PAGE TO LETTER AGREEMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

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The undersigned (i) consents and agrees to this letter, and (ii) agrees that the
Loan Papers to which it is a party (including, without limitation, the Facility
Guaranty dated as of June 9, 2006 or January 1, 2007, as applicable) shall
remain in full force and effect and shall continue to be the legal, valid and
binding obligation of the undersigned, enforceable against it in accordance with
its terms.

 

CONSENTED, ACKNOWLEDGED AND AGREED TO BY:

GEOMET GATHERING COMPANY, LLC,

an Alabama limited liability company

By:  

/s/ William C. Rankin

Name:  

William C. Rankin

Title:  

EVP & CFO

GEOMET OPERATING COMPANY, INC.,

an Alabama corporation

By:  

/s/ William C. Rankin

Name:  

William C. Rankin

Title:  

EVP & CFO

ACKNOWLEDGEMENT PAGE TO LETTER AGREEMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT