Exhibit 10.1

 

 

WAIVER AND FIRST AMENDMENT

TO CREDIT AGREEMENT

among

GASTAR EXPLORATION USA, INC.

THE GUARANTORS SIGNATORY HERETO

THE LENDERS SIGNATORY HERETO

and

AMEGY BANK NATIONAL ASSOCIATION,

as Administrative Agent

Effective April 1, 2008

 

 

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Table of Contents

 

Article I

   DEFINITIONS AND INTERPRETATION    1

1.1

   Terms Defined Above    1

1.2

   Terms Defined in Credit Agreement    2

1.3

   References    2

1.4

   Articles and Sections    2

1.5

   Number and Gender    2

Article II

   WAIVER    3

2.1

   Waiver    3

2.2

   Limitation on Waiver    3

Article III

   AMENDMENTS    3

3.1

   Amendment to Section 1.2    3

3.2

   Amendment to Section 5.8    3

3.3

   Amendment to Section 6.1    4

3.4

   Amendments to Section 7.1    4

3.5

   Amendment to Schedule 4.23    5

Article IV

   REPRESENTATIONS AND WARRANTIES    5

Article V

   RATIFICATION AND ACKNOWLEDGMENT    5

Article VI

   MISCELLANEOUS    5

6.1

   Successors and Assigns    5

6.2

   Rights of Third Parties    6

6.3

   Counterparts    6

6.4

   Integration    6

6.5

   Severability    6

6.6

   Governing Law    6

 

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WAIVER AND FIRST AMENDMENT

TO CREDIT AGREEMENT

This WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) executed
effective as of April 1, 2008 (the “Effective Date”) is by and among GASTAR
EXPLORATION USA, INC., a Michigan corporation (the “Borrower”), GASTAR
EXPLORATION, LTD., an Alberta, Canada corporation (the “Parent”), GASTAR
EXPLORATION NEW SOUTH WALES, INC., a Michigan corporation (“Gastar New South
Wales”), GASTAR EXPLORATION VICTORIA, INC., a Michigan corporation (“Gastar
Victoria”), GASTAR EXPLORATION TEXAS, INC., a Michigan corporation (“Gastar
Texas Inc”), GASTAR EXPLORATION TEXAS, LP, a Delaware limited partnership
(“Gastar Texas LP”), and GASTAR EXPLORATION TEXAS LLC, a Delaware limited
liability company (“Gastar Texas LLC”, and the Parent, Gastar New South Wales,
Gastar Victoria, Gastar Texas Inc., Gastar Texas LP and Gastar Texas LLC,
collectively, the “Initial Guarantors”), the lenders party to that certain
Credit Agreement dated effective November 29, 2007 by and among the Borrower,
the Initial Guarantors, the lenders party thereto or bound thereby from time to
time (the “Lenders”), and Amegy Bank National Association, a national banking
association, as administrative agent for the Lenders, letter of credit issuer
and collateral agent for the Lenders and certain other parties (the “Credit
Agreement”), and AMEGY BANK NATIONAL ASSOCIATION, a national banking
association, as administrative agent for the Lenders (in such capacity, the
“Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower, the Initial Guarantors, the Lenders and the Agent are
parties to the Credit Agreement;

WHEREAS, the Borrower and the Initial Guarantors have requested that the Agent
and the Lenders waive any default or right to exercise any remedy as a result of
the federal taxpayer identification number of the Parent having been set forth
incorrectly in Schedule 4.23 to the Credit Agreement, and the Agent and the
Lenders have agreed to do so as provided in this Amendment; and

WHEREAS, the Borrower, the Initial Guarantors, the Lenders and the Agent desire
to amend the Credit Agreement in the particulars hereinafter provided;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained in the Credit Agreement and herein, the parties hereto
agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

1.1 Terms Defined Above. As used in this Waiver and First Amendment to Credit
Agreement, each of the terms “Agent,” “Amendment,” “Borrower,” “Credit
Agreement,” “Effective Date,” “Gastar New South Wales,” “Gastar Texas Inc,”
“Gastar Texas LLC,” “Gastar Texas LP,” “Gastar Victoria,” “Initial Guarantors,”
“Lenders” and “Parent” shall have the meaning assigned to such term hereinabove.

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1.2 Terms Defined in Credit Agreement. Each term defined in the Credit Agreement
and used herein without definition shall have the meaning assigned to such term
in the Credit Agreement, unless herein expressly provided to the contrary.

1.3 References. References in this Amendment to Exhibit, Article or Section
numbers shall be to Exhibits, Articles or Sections of this Amendment, unless
expressly stated to the contrary. References in this Amendment to “hereby,”
“herein,” “hereinafter,” “hereinabove,” “hereinbelow,” “hereof,” “hereunder” and
words of similar import shall be to this Amendment in its entirety and not only
to the particular Schedule, Exhibit, Article, or Section in which such reference
appears. Specific enumeration herein shall not exclude the general and, in such
regard, the terms “includes” and “including” used herein shall mean “includes,
without limitation,” or “including, without limitation,” as the case may be,
where appropriate. Except as otherwise indicated, references in this Amendment
to statutes, sections, or regulations are to be construed as including all
statutory or regulatory provisions consolidating, amending, replacing,
succeeding, or supplementing the statute, section, or regulation referred to.
References in this Amendment to “writing” include printing, typing, lithography,
facsimile reproduction, and other means of reproducing words in a tangible
visible form. References in this Amendment to amendments and other contractual
instruments shall be deemed to include all exhibits and appendices attached
thereto and all subsequent amendments and other modifications to such
instruments, but only to the extent such amendments and other modifications are
not prohibited by the terms of the Credit Agreement or this Amendment.
References in this Amendment to Persons include their respective successors and
permitted assigns.

1.4 Articles and Sections. This Amendment, for convenience only, has been
divided into Articles and Sections; and it is understood that the rights and
other legal relations of the parties hereto shall be determined from this
instrument as an entirety and without regard to the aforesaid division into
Articles and Sections and without regard to headings prefixed to such Articles
or Sections.

1.5 Number and Gender. Whenever the context requires, reference herein made to
the single number shall be understood to include the plural; and likewise, the
plural shall be understood to include the singular. Definitions of terms defined
in the singular or plural shall be equally applicable to the plural or singular,
as the case may be, unless otherwise indicated. Words denoting sex shall be
construed to include the masculine, feminine and neuter, when such construction
is appropriate; and specific enumeration shall not exclude the general but shall
be construed as cumulative.

 

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ARTICLE II

WAIVER

2.1 Waiver. The Agent and the Lenders waive any Default or Event of Default
under the Credit Agreement or any other Loan Document as a result of the federal
taxpayer identification number of the Parent having been set forth incorrectly
in Schedule 4.23 to the Credit Agreement, together with the right of the Lender
to exercise any remedy based thereon.

2.2 Limitation on Waiver. Except for the waiver set forth above in Schedule 2.1,
nothing contained herein shall otherwise be deemed a consent to any violation
of, or a waiver of compliance with, any term, provision or condition set forth
in any of the Loan Documents or a consent to or waiver of any other or future
violations, breaches, Defaults or Events of Default.

ARTICLE III

AMENDMENTS

Effective as of the Effective Date, the Borrower, the Initial Guarantors, the
Lenders and the Agent hereby amend the Credit Agreement in the following
particulars:

3.1 Amendment to Section 1.2. Section 1.2 of the Credit Agreement is amended to
add thereto, at the appropriate alphabetical location, the following definition:

“‘Projected Production’ shall mean, at any time, the volumes of proved developed
producing and proved developed non-producing reserves of each commodity category
reasonably projected by the Borrower, in the most recent Reserve Report provided
pursuant to the provisions of Section 5.4, but adjusted as to such production
for the current and subsequent calendar years only, with the approval of the
Agent based on information provided by the Borrower in satisfaction of the
requirements of Section 5.8, to account for any increase (other than with
respect to reserves reflected in such Reserve Report as proved undeveloped) or
decrease in such projection anticipated because of information obtained by the
Borrower subsequent to the publication of such Reserve Report (including the
Borrower’s internal forecasts of production decline rates for existing wells and
additions to or deletions from anticipated future production from wells and
acquisitions coming on stream or failing to come on stream), to be produced from
the Oil and Gas Properties of the Borrower and the Guarantors during the terms
of then existing Commodity Hedge Agreements to which the Borrower or any of the
Guarantors is a party.”

3.2 Amendment to Section 5.8. Section 5.8 of the Credit Agreement is amended to
add thereto the following immediately preceding the period at the end of such
Section 5.8:

“and provide to the Agent, (a) no later than the 30th day following the end of
each calendar month, a report, in form reasonably acceptable to the Agent,
reflecting (i) in the case of Oil and Gas Properties of the Borrower or any of
the

 

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Guarantors located in the State of Texas or, regardless of location, operated by
the Borrower or any of the Guarantors, the volumes of hydrocarbons produced from
such Oil and Gas Properties during the calendar month preceding the calendar
month in which such report is to be provided, (ii) in the case of Oil and Gas
Properties of the Borrower or any of the Guarantors located in the State of
Wyoming or, regardless of location, not operated by the Borrower or any of the
Guarantors, the volumes of hydrocarbons produced from such Oil and Gas
Properties during the period covered by the information most recently received
by the Borrower or the relevant Guarantor from the operator or operators of such
Oil and Gas Properties and (iii) the details of the notional amounts of
hydrocarbons, as of the end of the calendar month preceding the calendar month
in which such report is to be provided, under then existing Commodity Hedge
Agreements to which any of the Borrower and the Guarantors is a party and
(b) prior to the Borrower or any Guarantor entering into any Commodity Hedge
Agreement in reliance on adjustments to the volumes of reserves projected to be
produced in the most recent Reserve Report provided pursuant to the provisions
of Section 5.4 contemplated in the definition of Projected Production appearing
in Section 1.2, a statement of the adjustments made and the basis therefor.”

3.3 Amendment to Section 6.1. Clause (c) in the proviso appearing in Section 6.1
of the Credit Agreement is amended to read as follows in its entirety:

“(c) Indebtedness under Commodity Hedge Agreements (other than those entered
into on a speculative basis), including reimbursement obligations under letters
of credit securing or supporting such Indebtedness, with any Approved Hedge
Counterparty, Secured Third Party Hedge Counterparty or, so long as each such
Person is acceptable to the Agent, other counterparties, provided that (i) such
agreements shall not be for a term in excess of three years, (ii) such
agreements, to the extent constituting floors, shall not be entered into with
respect to more than eighty five percent (85%), in the aggregate, of the
Projected Production not the subject of a Commodity Hedge Agreement which is the
subject of the immediately following clause (iii); provided that if the
Available Commitment is at least equal to ten percent (10%) of the Commitment
Amount, such agreements may cover greater volumes of reserves, (iii) such
agreements, to the extent not constituting floors, shall not be entered into
with respect to more than eighty five percent (85%), in the aggregate, of the
Projected Production not the subject of a Commodity Hedge Agreement which is the
subject of the immediately preceding clause (ii) and (iv) the floor prices in
such agreements are not less than the prices used by the Agent in its most
recent Borrowing Base determination as of the time the relevant agreements are
entered into,”.

 

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3.4 Amendments to Section 7.1. Section 7.1 of the Credit Agreement is amended to
(a) delete “or” at the end of clause (m) of such Section 7.1, (b) revise clause
(n) of such Section 7.1 to be clause (o) of such Section 7.1 and (c) add the
following as clause (n) of such Section 7.1:

“(n) as of the end of any calendar month during which the Borrower or any of the
Guarantors had Commodity Hedge Agreements (other than floors) in effect for
volumes in excess of the volumes of reserves projected to be produced in the
most recent Reserve Report provided pursuant to the provisions of Section 5.4,
the notional amount of hydrocarbon production for such calendar month under such
Commodity Hedge Agreements exceeds actual production from the Oil and Gas
Properties of the Borrower and the Guarantors for such calendar month; provided,
however, that, for the first 30 days only following any curtailment of
production from any of the Oil and Gas Properties of the Borrower or any of the
Guarantors due to any condition, event or occurrence downstream of a wellhead
and not within the reasonable control of the Borrower or the relevant Guarantor
(including any matter with respect to third party pipelines or processing
facilities), for purposes of this clause (n) each well so affected shall be
deemed to have continued to produce during such 30 day period at the level at
which it was producing immediately prior to the relevant curtailment; or”.

3.5 Amendment to Schedule 4.23. Schedule 4.23 to the Credit Agreement is amended
to reflect the federal taxpayer identification number for the Parent to be
98-0570897.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each of the Borrower and the Initial Guarantors expressly re-makes, in favor of
the Agent and the Lenders, each of the representations and warranties set forth
in Article IV of the Credit Agreement and in the other Loan Documents and made
by it and represents and warrants that all such representations and warranties
remain true and correct.

ARTICLE V

RATIFICATION AND ACKNOWLEDGMENT

Each of the Borrower, the Initial Guarantors, the Lenders and the Agent does
hereby adopt, ratify and confirm the Credit Agreement, as amended hereby, and
each of the other Loan Documents to which it is a party and acknowledges and
agrees that the Credit Agreement, as amended hereby, and each of the other Loan
Documents to which it is a party is and remains in full force and effect.

ARTICLE VI

MISCELLANEOUS

6.1 Successors and Assigns. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted pursuant to the Credit Agreement.

 

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6.2 Rights of Third Parties. Except as provided in Section 6.1, all provisions
herein are imposed solely and exclusively for the benefit of the parties hereto.

6.3 Counterparts. This Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, and all of such counterparts
taken together shall be deemed to constitute one and the same instrument and
shall be enforceable as of the Effective Date upon the execution of one or more
counterparts hereof by each of the parties hereto. In this regard, each of the
parties hereto acknowledges that a counterpart of this Amendment containing a
set of counterpart execution pages reflecting the execution of each party hereto
shall be sufficient to reflect the execution of this Amendment by each necessary
party hereto and shall constitute one instrument.

6.4 Integration. This Amendment constitutes the entire agreement among the
parties hereto with respect to the subject hereof. All prior understandings,
statements and agreements, whether written or oral, relating to the subject
hereof are superseded by this Amendment.

6.5 Severability. In the event that any one or more of the provisions contained
in this Amendment shall for any reason be held invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Amendment.

6.6 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF SUCH LAWS RELATING TO CONFLICTS OF
LAW.

(Signatures appear on following pages)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and First
Amendment to Credit Agreement to be duly executed and delivered, as of the
Effective Date, by their proper and duly authorized officers.

 

BORROWER: GASTAR EXPLORATION USA, INC. By:  

/s/ MICHAEL A. GERLICH

  Michael A. Gerlich   Secretary and Treasurer INITIAL GUARANTORS: GASTAR
EXPLORATION LTD. By:  

/s/ MICHAEL A. GERLICH

  Michael A. Gerlich   Vice President and Chief Financial Officer

(Signatures continue on following pages)

 

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GASTAR EXPLORATION NEW SOUTH WALES, INC. By:  

/s/ MICHAEL A. GERLICH

  Michael A. Gerlich   Secretary and Treasurer GASTAR EXPLORATION VICTORIA, INC.
By:  

/s/ MICHAEL A. GERLICH

  Michael A. Gerlich   Secretary and Treasurer GASTAR EXPLORATION TEXAS, INC.
By:  

/s/ MICHAEL A. GERLICH

  Michael A. Gerlich   Secretary and Treasurer GASTAR EXPLORATION TEXAS, LP By:
 

Gastar Exploration Texas LLC,

its General Partner

By:  

/s/ MICHAEL A. GERLICH

  Michael A. Gerlich   Secretary and Treasurer

(Signatures continue on following pages)

 

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GASTAR EXPLORATION TEXAS LLC By:  

/s/ MICHAEL A. GERLICH

  Michael A. Gerlich   Secretary and Treasurer

(Signatures continue on following page)

 

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AGENT: AMEGY BANK NATIONAL ASSOCIATION, as Agent By:  

/s/ W. BRYAN CHAPMAN

  W. Bryan Chapman   Senior Vice President LENDER: AMEGY BANK NATIONAL
ASSOCIATION By:  

/s/ W. BRYAN CHAPMAN

  W. Bryan Chapman   Senior Vice President

 

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