Exhibit 10.1
Execution Version
THIRD AMENDMENT TO CREDIT AGREEMENT
     This THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of
May 14, 2009, among GASCO ENERGY, INC. (“Borrower”), CERTAIN SUBSIDIARIES OF
BORROWER, as Guarantors (the “Guarantors”), the LENDERS party hereto (the
“Lenders”), and JPMORGAN CHASE BANK, N.A., as Administrative Agent
(“Administrative Agent”). Unless the context otherwise requires or unless
otherwise expressly defined herein, capitalized terms used but not defined in
this Amendment have the meanings assigned to such terms in the Credit Agreement
(as defined below).
WITNESSETH:
     WHEREAS, Borrower, Guarantors, Administrative Agent and Lenders have
entered into that certain Credit Agreement dated as of March 29, 2006 (as the
same has been and may hereafter be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”); and
     WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative
Agent desire to amend the Credit Agreement as provided herein upon the terms and
conditions set forth herein.
     NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
Borrower, the Guarantors, the Lenders and the Administrative Agent hereby agree
as follows:
SECTION 1. Amendments to Credit Agreement. Subject to the satisfaction or waiver
in writing of each condition precedent set forth in Section 5 of this Amendment,
and in reliance on the representations, warranties, covenants and agreements
contained in this Amendment, the Credit Agreement shall be amended in the manner
provided in this Section 1 effective as of the date Borrower satisfies the
conditions set forth in Section 5 of this Amendment.
     1.1 Additional Definition. Section 1.01 of the Credit Agreement shall be
and it hereby is amended by inserting the following definition in appropriate
alphabetical order:
          “Third Amendment Effective Date” means May 14, 2009.
     1.2 Amended Definitions. The following definitions in Section 1.01 of the
Credit Agreement shall be and they hereby are amended and restated in their
respective entireties to read as follows:
     “Applicable Rate” means, for any day, with respect to any Eurodollar Loan
or ABR Loan, or with respect to the Unused Commitment Fees payable hereunder, as
the case may be, the applicable rate per annum set forth below under the caption
“Eurodollar Spread”, “ABR Spread” or “Unused Commitment

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     Fee Rate”, as the case may be, based upon the Borrowing Base Usage
applicable on such date:

                                      ABR   Unused Commitment Borrowing Base
Usage   Eurodollar Spread   Spread   Fee Rate
³ 90%
    325 b.p.       225 b.p.       50 b.p.  
 
                       
³ 75% and < 90%
    300 b.p.       2.00 b.p.       50 b.p.  
 
                       
³ 50% and < 75%
    275 b.p.       175 b.p.       50 b.p.  
 
                       
< 50%
    250 b.p.       150 b.p.       50 b.p.  

Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next change.
     “LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, the greater of (a) the rate appearing on Reuters BBA Libor
Rates Page 3750 (or on any successor or substitute page of such page, providing
rate quotations comparable to those currently provided on such page of such
page, as determined by the Administrative Agent from time to time for purposes
of providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period and (b) two percent
(2.00%) per annum. In the event that such rate is not available at such time for
any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
     “Minimum Collateral Amount” means (a) at any time during the period from
the Third Amendment Effective Date until ten (10) days after the Third Amendment
Effective Date, an amount equal to fifty-five percent (55%) of the Engineered
Value of all Borrowing Base Properties at such time and (b) at any time
thereafter, an amount equal to ninety percent (90%) of the Engineered Value of
all Borrowing Base Properties at such time.
     “Redetermination Date” means each date on which the Borrowing Base is
redetermined pursuant to the terms hereof, which shall be (a) with respect to
any

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Scheduled Redetermination, on or about May 1 and November 1 of each year,
commencing May 1, 2006, (b) with respect to any Special Redetermination
requested by the Borrower pursuant to Section 3.03, the first day of the first
month which is not less than twenty (20) Business Days following the date of a
request for a Special Redetermination, and (c) with respect to any Special
Redetermination requested by the Required Lenders, the date notice of such
Redetermination is delivered to the Borrower pursuant to Section 3.04.
     1.3 Repayment of Loans; Evidence of Debt. Clause (e) of Section 2.08 of the
Credit Agreement shall be and it hereby is amended and restated in its entirety
to read as follows:
     (e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 11.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
     1.4 Mandatory Prepayment of Loans. Clause (a) of Section 2.10 of the Credit
Agreement shall be and it hereby is amended by adding the following provision to
the end thereof to read as follows:
     Notwithstanding anything to the contrary contained herein, with respect to
any Borrowing Base Deficiency arising from or related to the Redetermination of
the Borrowing Base on the Third Amendment Effective Date, the Borrower shall
prepay the principal amount of the Loans in an amount sufficient to eliminate
such Borrowing Base Deficiency on or before the Third Amendment Effective Date.
     1.5 Special Redeterminations. The first sentence of Section 3.03 of the
Credit Agreement shall be and it hereby is amended and restated in its entirety
to read as follows:
     In addition to Scheduled Redeterminations, (a) the Borrower shall be
permitted to request a Special Redetermination of the Borrowing Base once
between each Scheduled Redetermination and (b) the Required Lenders shall be
permitted to request a Special Redetermination of the Borrowing Base once
between each Scheduled Redetermination; provided that, in addition to any
Special Redetermination of the Borrowing Base pursuant to this clause (b), the
Required Lenders shall make a Special Redetermination on or about June 30, 2009.
     1.6 Title. Section 6.10 of the Credit Agreement shall be and it hereby is
amended and restated in its entirety to read as follows:

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     Section 6.10. Title Data. The Borrower will, and will cause each Guarantor
that is an owner of Mortgaged Properties to, deliver to the Administrative Agent
such opinions of counsel and other evidence of title as the Administrative Agent
shall deem reasonably necessary or appropriate to verify (a) the Borrower’s and
such Guarantor’s title to Mortgaged Properties with an Engineered Value of
(i) at any time prior to twenty (20) days after the Third Amendment Effective
Date, not less than 80% of the Minimum Collateral Amount specified in clause
(a) of the definition thereof, and (ii) at all other times, not less than 80% of
the Minimum Collateral Amount specified in clause (b) of the definition thereof,
and (b) the validity, perfection and priority of the Liens created by such
Mortgages and such other matters regarding such Mortgages as Administrative
Agent shall reasonably request.
     1.7 Consultant. Article VI of the Credit Agreement shall be and it hereby
is amended by adding to the end thereof a new Section 6.15 to read as follows:
     Section 6.15. Consultant. No later than May 29, 2009, the Borrower shall
engage a financial consultant reasonably acceptable to the Administrative Agent
on terms and conditions reasonably acceptable to the Administrative Agent and
neither the engagement of such financial consultant nor the terms and conditions
of such engagement may be terminated, amended, modified or supplemented without
the prior written consent of the Administrative Agent.
     1.8 Swap Agreements. Section 7.05 of the Credit Agreement shall be and it
hereby is amended and restated in its entirety to read as follows:
     Section 7.05. Swap Agreements. The Borrower will not, nor will it permit
any of its Restricted Subsidiaries to, enter into or maintain any Swap
Agreement, except Swap Agreements with an Approved Counterparty having a tenor
not greater than 5 years entered into in the ordinary course of business and not
for speculative purposes to (a) hedge or mitigate Crude Oil and Natural Gas
price risks to which the Borrower or any Restricted Subsidiary has actual
exposure; provided that such Swap Agreements (at the time each transaction under
such Swap Agreement is entered into) would not cause the aggregate notional
volume for each of Crude Oil and Natural Gas, calculated separately, under all
Swap Agreements then in effect to exceed eighty percent (80%) of the “forecasted
production from proved producing reserves” (as defined below) of the Borrower
and the Restricted Subsidiaries for each month during the period such Swap
Agreement is in effect; except that, with respect to the determination of the
Borrower’s compliance with this Section 7.05 during the calendar year ending
December 31, 2009, such notional volumes for each of Crude Oil and Natural Gas,
calculated separately, shall not exceed the greater of (i) the notional volumes
of all Swap Agreements in effect as of April 22, 2008 and (ii) the notional
volumes permitted under the immediately preceding proviso, and (b) effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) the notional amounts of
which

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(when aggregated with all other Swap Agreements of the Borrower and its
Subsidiaries then in effect with respect to interest rates) do not exceed 100%
of the then outstanding principal amount of the Indebtedness for borrowed money
of the Borrower and its Subsidiaries, on a consolidated basis. As used in this
clause, “forecasted production from proved producing reserves” means the
forecasted production of Crude Oil and Natural Gas as reflected in the most
recent Reserve Report delivered to the Administrative Agent pursuant to
Section 6.01, after giving effect to any pro forma adjustments for the
consummation of any Acquisitions or dispositions since the effective date of
such Reserve Report. In the event any Credit Party enters into a Swap Agreement,
the terms and conditions of such Swap Agreement may not be amended or modified,
nor may any Credit Party sell, assign, monetize, transfer, cancel or otherwise
dispose of any of its rights and interests in any such Swap Agreement without
the prior written consent of Required Lenders (it being understood that any
Lender Counterparty may sell assign, transfer, unwind, novate or otherwise
dispose of its rights and interests in any Swap Agreement to any Approved
Counterparty at any time). Upon the request of the Required Lenders, Borrower
will, and will cause each Restricted Subsidiary to, take all actions necessary
to cause all of its right, title and interest in each Swap Agreement to which it
is a party and the hedge transactions related thereto to be collaterally
assigned to the Administrative Agent, for the benefit of the Secured Parties,
and shall, if requested by the Administrative Agent or the Required Lenders, use
its commercially reasonable efforts to cause each such agreement or contract to
(a) expressly permit such assignment and (b) upon the occurrence of any default
or event of default under such agreement or contract, (i) to permit the Lenders
to cure such default or event of default and assume the obligations of such
Credit Party under such agreement or contract and (ii) to prohibit the
termination of such agreement or contract by the counterparty thereto if the
Lenders assume the obligations of such Credit Party under such agreement or
contract and the Lenders take the actions required under the foregoing clause
(i). Upon the request of the Administrative Agent, the Borrower shall, within
thirty (30) days of such request, provide to the Administrative Agent and each
Lender copies of all agreements, documents and instruments evidencing the Swap
Agreements not previously delivered to the Administrative Agent and Lenders,
certified as true and correct by a Financial Officer of the Borrower, and such
other information regarding such Swap Agreements as the Administrative Agent and
Lenders may reasonably request.
     1.9 Notices. Clause (ii) of Section 11.01(a) of the Credit Agreement shall
be and it hereby is amended and restated in its entirety to read as follows:
     (ii) if to the Administrative Agent or Issuing Bank, to JPMorgan Chase
Bank, N.A., 10 South Dearborn Street, 19th Floor, Chicago, Illinois 60603,
Telecopy No.: (312) 385-7051, Attention: Tess Siao, with a copy to JPMorgan
Chase Bank, N.A., Mail Code TX2-S038, 712 Main Street, 8th Floor, Houston, Texas
77002, Telecopy No. (713) 216-7770, Attention: Ryan Fuessel, Senior Vice
President;

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     1.10 Amendment to Schedules. Schedule 2.01 of the Credit Agreement shall be
and it hereby is amended and restated in its entirety and replaced with
Schedule 2.01 attached hereto.
SECTION 2. Consent. The Administrative Agent and the Lenders hereby consent to
any Credit Party selling, assigning or monetizing its rights and interests in
any Swap Agreement during the period from and including May 7, 2009 to and
including the Third Amendment Effective Date so long as (x) the consideration
received in respect of such sale, assignment or monetization is equal to or
greater than the fair market value of such Credit Party’s rights and interests
in the Swap Agreements subject to such sale, assignment or monetization,
(y) 100% of the consideration received by such Credit Party for such sale,
assignment or monetization is in the form of cash, and (z) immediately upon the
receipt of the cash proceeds from such sale, assignment or monetization, such
Credit Party applies such cash proceeds (net of any reasonable out-of-pocket
fees and expenses incurred by such Credit Party in connection with such sale,
assignment or monetization and approved by the Administrative Agent) to prepay
the principal amount of the Loans. The consent provided in this Section 2 shall
be deemed to be effective as of May 7, 2009 upon the satisfaction of the
conditions set forth in Section 5 of this Amendment.
SECTION 3. Redetermined Borrowing Base. This Amendment shall constitute notice
of the Redetermination of the Borrowing Base pursuant to Section 3.04 of the
Credit Agreement, and the Administrative Agent, the Lenders and the Borrower
hereby acknowledge that effective as of the Third Amendment Effective Date, the
Borrowing Base is $35,000,000.
SECTION 4. Commitments. The Administrative Agent and the Lenders hereby agree
that, effective as of the Third Amendment Effective Date, the Commitment and
Applicable Percentage of each Lender shall be as set forth on Schedule 2.01 of
this Amendment.
SECTION 5. Conditions. The amendments to the Credit Agreement contained in
Section 1 of this Amendment and the redetermination of the Borrowing Base
contained in Section 3 of this Amendment shall be effective upon the
satisfaction of each of the conditions set forth in this Section 5.
     5.1 Execution and Delivery. Each Credit Party, the Lenders and the
Administrative Agent shall have executed and delivered this Amendment and any
other required document, all in form and substance satisfactory to
Administrative Agent.
     5.2 No Default. No Default shall have occurred and be continuing or shall
result from the effectiveness of this Amendment.
     5.3 Mortgages and Title. The Administrative Agent shall have received
Mortgages and title information, in each case, reasonably satisfactory to the
Administrative Agent with respect to the Borrowing Base Properties, or the
portion thereof, as required by Sections 6.09 and 6.10 of the Credit Agreement.
     5.4 Other Documents. The Administrative Agent shall have received such
other instruments and documents incidental and appropriate to the transaction
provided for herein as the Administrative Agent or its special counsel may
reasonably request prior to the date hereof,

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and all such documents shall be in form and substance reasonably satisfactory to
the Administrative Agent.
SECTION 6. Representations and Warranties of the Credit Parties. To induce the
Lenders to enter into this Amendment, each Credit Party hereby represents and
warrants to the Administrative Agent and the Lenders as follows:
     6.1 Reaffirmation of Representations and Warranties/Further Assurances.
After giving effect to the amendments herein, each representation and warranty
of such Credit Party contained in the Credit Agreement or in any other Loan
Document is true and correct in all material respects on the date hereof (except
to the extent such representations and warranties relate solely to an earlier
date, in which case, such representations and warranties are true and correct as
of such earlier date).
     6.2 Corporate Authority; No Conflicts. The execution, delivery and
performance by such Credit Party of this Amendment and all documents,
instruments and agreements contemplated herein are within such Credit Party’s
corporate or other organizational powers, have been duly authorized by all
necessary action, require no action by or in respect of, or filing with, any
court or agency of government and do not violate or constitute a default under
any provision of any applicable law or other agreements binding upon such Credit
Party or result in the creation or imposition of any Lien upon any of the assets
of such Credit Party except for Liens permitted under Section 7.02 of the Credit
Agreement.
     6.3 Enforceability. This Amendment constitutes the valid and binding
obligation of such Credit Party enforceable in accordance with its terms, except
as (i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditor’s rights generally, and (ii) the availability of
equitable remedies may be limited by equitable principles of general
application.
     6.4 No Default. As of the date hereof, both before and immediately after
giving effect to this Amendment, no Default has occurred and is continuing.
SECTION 7. Miscellaneous.
     7.1 Reaffirmation of Loan Documents and Liens. Any and all of the terms and
provisions of the Credit Agreement and the Loan Documents shall, except as
amended and modified hereby, remain in full force and effect and are hereby in
all respects ratified and confirmed by each Credit Party. Each Credit Party
hereby agrees that the amendments and modifications herein contained shall in no
manner affect or impair the liabilities, duties and obligations of any Credit
Party under the Credit Agreement and the other Loan Documents or the Liens
securing the payment and performance thereof.
     7.2 Parties in Interest. All of the terms and provisions of this Amendment
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns.

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     7.3 Legal Expenses. Each Credit Party hereby agrees to pay all reasonable
fees and expenses of special counsel to the Administrative Agent incurred by the
Administrative Agent in connection with the preparation, negotiation and
execution of this Amendment and all related documents.
     7.4 Counterparts. This Amendment may be executed in one or more
counterparts and by different parties hereto in separate counterparts each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. Delivery of photocopies of the signature pages to this
Amendment by facsimile or electronic mail shall be effective as delivery of
manually executed counterparts of this Amendment.
     7.5 Complete Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
     7.6 Headings. The headings, captions and arrangements used in this
Amendment are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify or modify the terms of this Amendment, nor affect the
meaning thereof.
     7.7 Governing Law. This Amendment shall be construed in accordance with and
governed by the law of the State of Texas.
[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties have caused this Third Amendment to Credit
Agreement to be duly executed as of the date first above written.

            BORROWER:

GASCO ENERGY, INC.
      By:   /s/ W. King Grant         Name:   W. King Grant        Title:  
Executive Vice President and Chief
Financial Officer        GUARANTORS:

GASCO PRODUCTION COMPANY
      By:   /s/ W. King Grant         Name:   W. King Grant        Title:  
Executive Vice President and Chief
Financial Officer        RIVERBEND GAS GATHERING, LLC
      By:  Gasco Energy, Inc.
Its Managing Member             By:   /s/ W. King Grant         Name:   W. King
Grant        Title:   Executive Vice President and Chief
Financial Officer        MYTON OILFIELD RENTALS, LLC
      By:  Gasco Energy, Inc.
Its Managing Member             By:   /s/ W. King Grant         Name:   W. King
Grant        Title:   Executive Vice President and Chief
Financial Officer     

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            JPMORGAN CHASE BANK, N.A.,
as a Lender and as Administrative Agent,
      By:   /s/ Ryan Fuessel         Name:   Ryan Fuessel        Title:   Senior
Vice President     

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            GUARANTY BANK AND TRUST COMPANY
as a Lender
      By:   /s/ Gail J. Nofsinger         Name:   Gail J. Nofsinger       
Title:   Senior Vice President     

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SCHEDULE 2.01
Applicable Percentages and Commitments

                                      Applicable     Lender   Title   Percentage
  Commitment 1
JPMorgan Chase Bank, N.A.
  Administrative Agent     88.8888889 %   $ 31,111,111.12  
712 Main Street

  and a Lender                
8th Floor
Mail Code: TX2-S038
Houston, Texas 77002
Attention: Ryan Fuessel
Telephone: (713) 216-6291
Facsimile: (713) 216-7770
                       
 
                       
with a copy to:
                       
 
                       
JPMorgan Chase Bank, N.A.
10 South Dearborn
Floor 19
Chicago, Illinois 60603
Attention: Tess Siao
Telephone: (312) 385-7051
Facsimile: (312) 385-7096
teresita.r.siao@jpmchase.com

                       
 
                       
Guaranty Bank and Trust Company
  Lender     11.1111111 %   $ 3,888,888.88  
1331 Seventeenth Street
2nd Floor
Denver, CO 80202
Attention: Gail J. Nofsinger
Telephone: (303) 293-5521
Facsimile: (303) 313-6758
gail.nofsinger@guarantybankco.com
                       
 
                       
TOTAL
            100.00 %   $ 35,000,000  

 

1   As of the Third Amendment Effective Date, as such amount may be (a) reduced
from time to time pursuant to Section 2.02 of the Credit Agreement, (b) reduced
or increased from time to time as a result of changes in the Borrowing Base
pursuant to Article III of the Credit Agreement, or (c) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 11.04 of the Credit Agreement.

      Third Amendment to Credit Agreement   SCHEDULE 2.01