Exhibit 10.1
 
As of September 15, 2009

Teton Energy Corporation
600 17th Street, Suite 1600 North
Denver, Colorado 80202
Attention: Jonathan Bloomfield
 
Re:
Third Amendment to Second Amended and Restated Credit Agreement and Forbearance
Agreement (the “Third Amendment”) dated effective as of August 26, 2009, among
Teton Energy Corporation, a Delaware corporation (“Borrower”), the financial
institutions party thereto as lenders (“Lenders”), and JPMorgan Chase Bank,
N.A., as Administrative Agent (“Administrative Agent”).  Unless otherwise
defined herein, all terms used herein which are defined in the Third Agreement
shall have the meaning assigned to such terms in the Third Amendment.

 
Ladies and Gentlemen:
 
Borrower has advised Administrative Agent and Lenders that it desires to amend
certain terms of the Third Amendment.  In consideration of the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and confessed, the
parties hereto hereby agree as follows:
 
1.
Amendments.  In reliance on the representations, warranties, covenants and
agreements contained in this letter agreement, and subject to the satisfaction
of the conditions precedent set forth in Section 3 hereof, the Third Amendment
is hereby amended effective as of the date hereof as follows:

 

 
(a) Section 2.1 of the Third Amendment.  Section 2.1 of the Third Amendment is
hereby amended by replacing each reference to “September 15, 2009” with
“September 30, 2009”.  
 
(b) Section 3.1 of the Third Amendment.  Section 3.1 of the Third Amendment is
hereby amended by inserting the following definition of “Indebtedness” before
the definition of “Interest Payment Date”:
       
“Indebtedness” means any and all amounts owing or to be owing by  Borrower, any
Subsidiary or any Guarantor (whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising):  (a) to Administrative Agent, the Issuing Bank
or any Lender under any Loan Document; (b) to any Lender or any Affiliate of a
Lender under any Swap Agreement between Borrower or any Subsidiary and such
Lender or Affiliate of a Lender while such Person (or in the case of its
Affiliate, the Person affiliated therewith) is a Lender hereunder; (c) to any
Lender or any Affiliate of a Lender created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor) in connection with treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse transactions,
return items, overdrafts and interstate depository network services) provided to
Borrower, any Subsidiary or any Guarantor by any Lender or any of its
Affiliates; and (d) all renewals, extensions and/or rearrangements of any of the
above.  
       
(c) Section 7.5 of the Third Amendment.  Section 7.5 of the Third Amendment is
hereby amended by replacing the reference to “September 15, 2009” with
“September 30, 2009”.  

 

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Teton Energy Corporation
As of September 15, 2009
Page 2

 
2.
Representations and Warranties.  To induce Lenders and Administrative Agent to
enter into this letter agreement, Borrower hereby represents and warrants to
Lenders and Administrative Agent as follows:

 

 
(a) Reaffirm Existing Representations and Warranties.  Except for the
representation and warranties made in Sections 7.04(b) and 7.22, each
representation and warranty of Borrower and its Subsidiaries contained in the
Credit Agreement is true and correct on the date hereof  and will be true and
correct after giving effect to this letter agreement (other than breaches which
result from the Specified Defaults).  
 
(b) Due Authorization; No Conflict.  The execution, delivery and performance by
Borrower of this letter agreement are within Borrower’s corporate powers, have
been duly authorized by all necessary action, require no action by or in respect
of, or filing with, any governmental body, agency or official and do not violate
or constitute a default under any provision of applicable law or any material
agreement binding upon Borrower or any of its Subsidiaries or result in the
creation or imposition of any Lien upon any of the assets of Borrower or any of
its Subsidiaries.  
 
(c) Validity and Enforceability.  This letter agreement constitutes the valid
and binding obligation of Borrower enforceable in accordance with its terms,
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor’s rights generally, and (b) the
availability of equitable remedies may be limited by equitable principles of
general application.  
 
(d) No Default or Event of Default.  No Default or Event of Default has occurred
which is continuing, other than the Specified Defaults.  
 
(e) No Defense.  Borrower acknowledges that Borrower has no defense to (i)
Borrower’s obligation to pay any amount payable under any Loan Document when
due, or (ii) the validity, enforceability or binding effect against Borrower of
the Credit Agreement or any of the other Loan Documents or any Liens intended to
be created thereby.

 
3.
Conditions Precedent.  The amendments contained in Section 1 hereof shall be
effective as of the date when the following conditions precedent have been
satisfied:

 

 
(a) No Default.  No Default or Event of Default shall have occurred which is
continuing, other than the Specified Defaults.
     
(b) Documents.  Administrative Agent shall have been provided with executed
counterparts of this letter agreement and such other documents, instruments and
agreements, and Borrower and each of its Subsidiaries shall have taken such
actions, as the Administrative Agent may reasonably require in connection with
this letter agreement and the transactions contemplated hereby.

 
 
4.
Miscellaneous.  (a) Borrower hereby agrees to pay on demand all reasonable fees
and expenses incurred by the Administrative Agent (including, without
limitation, reasonable fees and expenses of counsel to the Administrative Agent)
in connection with the preparation, negotiation and execution of this letter
agreement and all related documents, (b) this letter agreement may be executed
in counterparts, and all parties need not execute the same counterpart; however,
no party shall be bound by this letter agreement until a counterpart hereof has
been executed by Borrower and Lenders; facsimiles or other electronic
transmission (e.g., pdf) shall be effective as originals, (c) THIS LETTER
AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES REGARDING THE MATTERS
SET FORTH HEREIN 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, (d) this letter agreement constitutes a “Loan
Document” under and as defined in Section 1.02 of the Credit Agreement, and (e)
this letter agreement shall be governed by, and construed in accordance with,
the laws of the State of Texas.

 

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Teton Energy Corporation
As of September 15, 2009
Page 3
 
Please evidence your agreement to each of the provisions of this letter
agreement by executing a counterpart hereof where indicated and returning an
executed counterpart to Catherine S. Callahan, counsel for Administrative Agent,
via facsimile number (214) 999-7958 or via e-mail to ccallahan@velaw.com.
 
[Signature Pages Follow]
 

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TETON ENERGY CORPORATION, as Borrower
 
 
 
By:
        
Dominic J. Bazile II,
   
President and Chief Operating Officer

Each of the undersigned (i) consent and agree to this letter agreement and each
of the terms and provisions contained herein, and (ii) agree that the Loan
Documents to which it is a party shall remain in full force and effect and shall
continue to be the legal, valid and binding obligation of such Person,
enforceable against it in accordance with its terms.
 

 
ACKNOWLEDGED AND AGREED TO BY:
 
 
TETON NORTH AMERICA LLC, as Guarantor
                   
By:
        
Dominic J. Bazile II,
   
President and Chief Operating Officer

 
 
 

 
TETON PICEANCE LLC, as Guarantor
         
 
 
 
By:
        
Dominic J. Bazile II,
   
President and Chief Operating Officer
   
 
 
 
 
TETON DJ LLC, as Guarantor
         
 
 
 
By:
        
Dominic J. Bazile II,
   
President and Chief Operating Officer
     

 
 

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[Signature Page to Letter Agreement – Teton Energy Corporation]

 
 
 

 
TETON WILLISTON LLC, as Guarantor
         
 
 
 
By:
        
Dominic J. Bazile II,
   
President and Chief Operating Officer
   
 
 
 
 
 
TETON BIG HORN LLC, as Guarantor
   
 
 
 
       
By:
        
Dominic J. Bazile II,
   
President and Chief Operating Officer
   
 
 
 
 
 
TETON DJCO LLC, as Guarantor
         
 
 
 
By:
        
Dominic J. Bazile II,
   
President and Chief Operating Officer
     

 

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[Signature Page to Letter Agreement – Teton Energy Corporation]

 
 
 

       
JPMORGAN CHASE BANK, N.A., as Administrative Agent and a Lender
             
By:
        
John Runger,
   
Managing Director

 
 

 

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[Signature Page to Letter Agreement – Teton Energy Corporation]

 

 

 
ROYAL BANK OF CANADA, as Syndication Agent and a Lender
             
By:
   
Name:
   
Title:
 

 
 

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[Signature Page to Letter Agreement – Teton Energy Corporation]

 
 

             
GUARANTY BANK AND TRUST COMPANY, as a Lender
             
By:
   
Name:
   
Title:
 

 
 
 
[Signature Page to Letter Agreement – Teton Energy Corporation]

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U.S. BANK NATIONAL ASSOCIATION, as a Lender
             
By:
   
Name:
   
Title:
 

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[Signature Page to Letter Agreement – Teton Energy Corporation]