Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
     This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of
December 10, 2008, 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 may 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 3 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 3 of this Amendment.
     1.1 Amended Definitions. The following definitions in Section 1.01 shall be
and they hereby are amended and restated in their respective entireties to read
as follows:
     “Alternate Base Rate” means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO
Rate for a one month Interest Period on such day (or if such day is not a
Business Day, the immediately preceding Business Day) plus 1%, provided that,
for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on
the rate appearing on the Reuters BBA Libor Rates Page 3750 (or on any successor
or substitute page of such page) at approximately 11:00 a.m. London time on such
day. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective
from and including the effective date of such change in the Prime Rate, the
Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

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

                          Unused Borrowing Base   Eurodollar   ABR   Commitment
Usage   Spread   Spread   Fee Rate
³ 90%
  225 b.p.   100 b.p.   50 b.p.
³ 75% and <90%
  200 b.p.   75 b.p.   50 b.p.
³ 50% and <75%
  175 b.p.   50 b.p.   50 b.p.
< 50%
  150 b.p.   25 b.p.   50 b.p.

     “Consolidated EBITDAX” means, with respect to the Borrower and its
Consolidated Subsidiaries for any period, Consolidated Net Income for such
period; plus, without duplication and to the extent deducted in the calculation
of Consolidated Net Income for such period, the sum of (a) income or franchise
Taxes paid or accrued; (b) Consolidated Interest Expense; (c) amortization,
depletion and depreciation expense; (d) any non-cash losses or charges on any
Swap Agreement resulting from the requirements of FASB Statement 133 for that
period; (e) oil and gas exploration and development expenses (including all
drilling, completion, gathering, geological and geophysical costs) for such
period; (f) losses from sales or other dispositions of assets (other than
Hydrocarbons produced in the ordinary course of business), (g) other
extraordinary or non-recurring losses, (h) workover expenses for such period and
(i) other non-cash charges (excluding accruals for cash expenses made in the
ordinary course of business); minus, to the extent included in the calculation
of Consolidated Net Income for such period, (i) the sum of (1) any non-cash
gains on any Swap Agreements resulting from the requirements of FASB Statement
133 for that period; (2) extraordinary or non-recurring gains; and (3) gains
from sales or other dispositions of assets (other than Hydrocarbons produced in
the ordinary course of business); provided that, with respect to the
determination of Borrower’s compliance with the leverage ratio set forth in
Section 7.11(b) for any period, Consolidated EBITDAX shall be calculated (which
calculations shall, in all respects, be acceptable to, and approved by the
Administrative Agent) to give effect, on a pro forma basis, to any Acquisitions
and dispositions of Oil and Gas Interests by the Borrower and its Consolidated
Subsidiaries made during such period as if such Acquisitions or dispositions
were made at the beginning of such period.
     “Consolidated Funded Indebtedness” means, as of any date, without
duplication, Indebtedness of the Borrower and the Consolidated Subsidiaries of
the type described in clauses (a), (b), (c), (e), (f), (g) or (h) of the
definition of Indebtedness.
     “Interest Payment Date” means (a) with respect to any ABR Loan, the last
day of each calendar quarter, and (b) with respect to any Eurodollar Loan, the
last day of the Interest Period

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applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period.
     “Interest Period” means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar week or month that is one week, two weeks,
one, two, three, six or, if available, nine or twelve months thereafter, as the
Borrower may elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
     “LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, 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. 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.
     “Maturity Date” means March 29, 2011.
     “Obligations” means all obligations of every nature of the Borrower from
time to time owed to the Administrative Agent, the Issuing Bank, the Lenders or
any of them and the Lender Counterparties under any Loan Document or Swap
Agreement (including, with respect to any transaction under any Swap Agreement,
obligations owed under any Swap Agreement to any Person that was a Lender
Counterparty at the time such transaction was entered into), whether for
principal, interest, reimbursement of amounts drawn under any Letter of Credit,
payments for early termination of Swap Agreements, funding indemnification
amounts, fees, expenses, indemnification or otherwise and all Cash Management
Obligations.

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     “Required Lenders” means, at any time, Lenders having Credit Exposures and
Unused Commitments representing at least 66-2/3% (or if there are less than four
Lenders, at least 75%) of the sum of the Aggregate Credit Exposure and all
Unused Commitments of all Lenders at such time or, if the Aggregate Commitment
has been terminated, Lenders having Credit Exposures representing at least
66-2/3% (or if there are less than four Lenders, at least 75%) of the sum of the
Aggregate Credit Exposure of all Lenders at such time; provided that the Unused
Commitment and the Credit Exposures held or deemed held by any Defaulting Lender
shall be excluded for the purposes of making a determination of Required
Lenders.
     1.2 Additional Definitions. Section 1.01 of the Credit Agreement is hereby
amended by adding the following definition in correct alphabetical order:
     “Cash Management Obligations” means, with respect to any Credit Party, any
obligations of such Credit Party owed to JPMorgan Chase Bank, N.A., any Lender,
any of their respective successors and assigns and any of their respective
Affiliates in respect of treasury management arrangements, depositary or other
cash management services.
     “Defaulting Lender” means any Lender, as determined by the Administrative
Agent, that has (a) failed to fund any portion of the Loans or participations in
LC Disbursements required to be funded by it hereunder within three Business
Days of the date required to be funded by it hereunder, (b) notified the
Borrower, the Administrative Agent, the Issuing Bank or any Lender in writing
that it does not intend to comply with any of its funding obligations under this
Agreement or has made a public statement to the effect that it does not intend
to comply with its funding obligations under this Agreement or under other
agreements in which it commits to extend credit, (c) failed, within three
Business Days after request by the Administrative Agent, to confirm that it will
comply with the terms of this Agreement relating to its obligations to fund
prospective Loans and participations in then outstanding LC Disbursements,
(d) otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it hereunder within three Business Days
of the date when due, unless the subject of a good faith dispute, or (e)(i)
become or is insolvent or has a parent company that has become or is insolvent
or (ii) become the subject of a bankruptcy or insolvency proceeding or
appointment or has a parent company that has become the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee or
custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment.
     “Minimum Collateral Amount” means, at any time, an amount equal to the
lesser of (i) eighty percent (80%) of the Engineered Value of all Borrowing Base
Properties at such time and (ii) 125% of the Borrowing Base then in effect.
     1.3 Deleted Definition. The definitions of “Bundle”, “Intercreditor
Agreement” and “Percentage” shall be and they hereby are deleted from
Section 1.01 of the Credit Agreement.
     1.4 Letters of Credit. Section 2.05(b) of the Credit Agreement shall be and
it hereby is amended and restated in its entirety to read as follows:

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     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank’s standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $10,000,000 and (ii) the
Aggregate Credit Exposure shall not exceed the Aggregate Commitment.
Notwithstanding the foregoing, the Issuing Bank shall not at any time be
obligated to issue, amend, renew or extend any Letter of Credit if any Lender is
at such time a Defaulting Lender hereunder, unless the Borrower cash
collateralizes each Defaulting Lender’s portion of all then outstanding LC
Exposure (calculated after giving effect to the issuance, amendment, renewal or
extension of such Letter of Credit) with respect to such Letter of Credit in
accordance with the procedures set forth in Section 2.05(j).
     1.5 Cash Collateralization of Letters of Credit. Section 2.05(j) of the
Credit Agreement shall be and it hereby is amended and restated in its entirety
to read as follows:
     (j) Cash Collateralization.
     (i) If at any time the Borrower elects to cash collateralize the LC
Exposure of any Defaulting Lender pursuant to Section 2.05(b), the Borrower
shall deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders (the “Cash Collateral
Account”), an amount in cash equal to such Defaulting Lender’s portion of the
total LC Exposure at such time as calculated pursuant to Section 2.05(b) (less
any amounts already on deposit in such Cash Collateral Account representing cash
collateral for any portion of such Defaulting Lender’s portion of the total LC
Exposure).
     (ii) If any Letter of Credit is outstanding at the time any Lender is a
Defaulting Lender, upon the written request of the Issuing Bank demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall
promptly, and in any event within one (1) Business Day after receipt by the
Borrower of written notice, cash collateralize such Defaulting Lender’s portion
of the total LC Exposure at such time by depositing in the Cash Collateral
Account

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an amount in cash equal to such Defaulting Lender’s portion of the total LC
Exposure (less any amounts already on deposit in such Cash Collateral Account
representing cash collateral for any portion of such Defaulting Lender’s portion
of the total LC Exposure).
     (iii) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Administrative Agent or
the Required Lenders (or, if the maturity of the Loans has been accelerated,
Lenders with LC Exposure representing greater than 66-2/3% of the total LC
Exposure) demanding the deposit of cash collateral for all LC Exposure pursuant
to this paragraph, the Borrower shall deposit in the Cash Collateral Account, an
amount in cash equal to the total LC Exposure as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in
clause (h) or (i) of Article IX.
     (iv) Deposits in the Cash Collateral Account made pursuant to the foregoing
paragraphs (i), (ii) and (iii) shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over the Cash Collateral
Account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits shall
not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure representing
66-2/3% or more of the total LC Exposure), be applied to satisfy other
obligations of the Borrower under this Agreement.
     If the Borrower is required to provide an amount of cash collateral
pursuant to paragraphs (i), (ii) or (iii) above, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three
(3) Business Days after (x) in the case of cash collateral provided pursuant to
paragraphs (i) or (ii) above, the applicable Defaulting Lender is no longer a
Defaulting Lender and (y) in the case of cash collateral provided pursuant to
paragraph (iii) above, all Events of Default have been cured or waived or after
such Defaulting Lender is no longer a Defaulting Lender, as applicable.
     1.6 Replacement of Lenders. Section 2.18(c) of the Credit Agreement shall
be and it hereby is amended and restated in its entirety to read as follows:

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     (c) If in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of this
Agreement or any other Loan Document as contemplated by Section 11.02, the
consent of Required Lenders shall have been obtained but the consent of one or
more of such other Lenders (each a “Non-Consenting Lender”) whose consent is
required has not been obtained or if a Lender is a Defaulting Lender; then, the
Borrower may elect to replace such Non-Consenting Lender or Defaulting Lender,
as the case may be, as a Lender party to this Agreement in accordance with and
subject to the restrictions contained in, and consents required by
Section 11.04; provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and if a Commitment is being
assigned, the Issuing Bank), which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.14 or payments required to be made pursuant to
Section 2.16, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply or, in the case of a Defaulting Lender, such
Lender is no longer a Defaulting Lender.
     1.7 Disclosure. Section 4.11 of the Credit Agreement shall be and it hereby
is amended and restated in its entirety to read as follows:
     Section 4.11. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
Restricted Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the other reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower or
any Restricted Subsidiary to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished), taken as a whole,
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to the
Projections, the Borrower represents only that such information was prepared in
good faith based on assumptions believed to be reasonable at the time.
     1.8 Capitalization; Corporate Information. Section 4.12 of the Credit
Agreement shall be and it hereby is amended and restated in its entirety to read
as follows:
     Section 4.12 Capitalization; Corporate Information. Schedule 4.12 (as the
same may be updated in accordance with Section 6.01(h)) lists, for each Credit
Party, its full legal name, its jurisdiction of organization and its federal tax
identification number and, with respect to each Restricted Subsidiary, the
number of shares of capital stock or other Equity Interests outstanding and the
owner(s) of such shares or Equity Interests.

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     1.9 Conditions Precedent to Effective Date. Clauses (m), (n) and (o) of
Section 5.01 of the Credit Agreement shall be and they hereby are amended by
deleting the text thereof in their entirety and substituting in lieu thereof
“[Intentionally omitted.]”.
     1.10 Conditions Precedent to Each Credit Event. Section 5.02(a) of the
Credit Agreement shall be and it hereby is amended and restated in its entirety
to read as follows:
     (a) The representations and warranties of each Credit Party set forth in
this Agreement shall be true and correct in all material respects on and as of
the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date.
     1.11 Financial Statements; Other Information. Section 6.01 of the Credit
Agreement shall be and it hereby is amended by (i) deleting the “and” at the end
of clause (g) thereof, (ii) renaming clause (h) thereof as “clause (i)” and
(iii) inserting a new clause (h) between clause (g) and clause (i) to read as
follows:
     (h) annually and concurrently with Borrower’s delivery of the Projections
under Section 6.01(g) (or more frequently if desired by Borrower), revisions and
supplements to Schedule 4.12 to the extent necessary to ensure that such
representation and warranty contained in Section 4.12 is true and correct in all
material respects; provided that delivery or receipt of such subsequent
disclosure shall not constitute a waiver by the Administrative Agent or any
Lender or a cure of any Default or Event of Default resulting from or arising
under the matters disclosed; and
     1.12 Mortgages. Section 6.09 of the Credit Agreement shall be and it hereby
is amended and restated in its entirety to read as follows:
     Section 6.09. Mortgages. The Borrower will, and will cause each Guarantor
that is an owner of Borrowing Base Properties to, execute and deliver to the
Administrative Agent, for the benefit of the Secured Parties, Mortgages in form
and substance acceptable to the Administrative Agent together with such other
assignments, conveyances, amendments, agreements and other writings, including,
without limitation, UCC-1 financing statements (each duly authorized and
executed, as applicable) as the Administrative Agent shall deem necessary or
appropriate to grant, evidence and perfect Liens in Borrowing Base Properties
with an Engineered Value not less than the Minimum Collateral Amount.
     1.13 Title. Section 6.10 of the Credit Agreement shall be and it hereby is
amended and restated in its entirety to read as follows:
     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 (i) the Borrower’s and
such Guarantor’s title to Mortgaged Properties with

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an aggregate value of not less (80%) of the Minimum Collateral Amount, and
(ii) 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.
     1.14 Indebtedness. Section 7.01(j) of the Credit Agreement shall be and it
hereby is amended and restated in its entirety to read as follows:
     (j) Other unsecured Indebtedness of the Credit Parties in an aggregate
principal amount not exceeding $2,500,000 at any time outstanding.
     1.15 Liens. Section 7.02(g) of the Credit Agreement shall be and it hereby
is amended and restated in its entirety to read as follows:
     (g) Subject to the SLB Agreement, Liens securing Indebtedness permitted
under Section 7.01(i); and
     1.16 Restricted Payments. Section 7.06 of the Credit Agreement shall be and
it hereby is amended and restated in its entirety to read as follows:
     Section 7.06. Restricted Payments. The Borrower will not, nor will it
permit any of its Restricted Subsidiaries to, declare or make, or agree to pay
or make, directly or indirectly, any Restricted Payment, except that (a) the
Borrower may declare and pay dividends with respect to its Equity Interests
payable solely in additional shares of its common stock, (b) the Borrower may
make Restricted Payments pursuant to and in accordance with stock option plans
or other benefit plans for management or employees of the Borrower and its
Restricted Subsidiaries in an aggregate amount not to exceed $1,500,000 in any
fiscal year, (c) any Restricted Subsidiary may make Restricted Payments to the
Borrower or any Guarantor, and (d) so long as no Default shall have occurred and
be continuing or would result from the making of such Restricted Payment,
Restricted Payments by the Borrower to fund the repurchase, redemption or other
acquisition or retirement for value of Equity Interests of the Borrower upon the
termination of employment, death, permanent disability or retirement of any
officer or employee of the Borrower or any of its Subsidiaries; provided that,
the aggregate amount of such Restricted Payments pursuant to this clause (d)
shall not exceed $1,500,000 in the aggregate
     1.17 Amendments to Organizational Documents and JVEA Documents.
Section 7.10 of the Credit Agreement shall be and it hereby is amended and
restated in its entirety to read as follows:
     Section 7.10. Amendments to Organizational Documents and JVEA Documents.
The Borrower will not, nor will it permit any of its Restricted Subsidiaries to,
enter into or permit any material modification or amendment of, or waive any
material right or obligation of any Person under its Organizational Documents
that would adversely affect the Lenders in any material respect. The Borrower
will not, nor will it permit any of its Restricted Subsidiaries to, enter into
or permit any modification or amendment of, or waive any material right or
obligation of any Person under any JVEA Document. The Borrower will not, nor
will it permit any Restricted Subsidiary other than Gasco Production, to be a
party to any JVEA Document.

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     1.18 Leverage Ratio. Section 7.11(b) of the Credit Agreement shall be and
it hereby is amended and restated in its entirety to read as follows:
     (b) Leverage Ratio. The Borrower will not permit the ratio, determined as
of the end of any fiscal quarter ending on or after March 31, 2006, of
(i) Senior Debt as of the end of such fiscal quarter, to (ii) Consolidated
EBITDAX for the four fiscal quarters then ended to be greater than 3.50 to 1.0.
     1.19 Events of Default. Article IX of the Credit Agreement shall be and it
hereby is amended by (i) deleting the reference to “$1,000,000” in clause
(k) thereof and substituting in lieu thereof a reference to “$1,500,000”,
(ii) adding the word “or” at the end of clause (n) thereof, (iii) deleting the
“;” at the end of clause (o) thereof and substituting in lieu thereof a ”.”, and
(iv) deleting clause (p) thereof in its entirety.
     1.20 Amendments. Section 11.02(b) of the Credit Agreement shall be and it
hereby is amended and restated in its entirety to read as follows:
     Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Credit Parties and the Required Lenders or by the Credit Parties and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (1) increase the Borrowing Base without the consent of each
Lender, (2) increase the Applicable Percentage of any Lender or the Aggregate
Commitment above the Maximum Facility Amount without the written consent of such
Lender, (3) reduce the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby, (4) postpone the scheduled date
of payment of the principal amount of any Loan or LC Disbursement, or any
interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse any such payment, or postpone the scheduled date of expiration of any
of the Aggregate Commitment, without the written consent of each Lender affected
thereby, (5) change Section 2.17(b) or Section 2.17(c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (6) release any Credit Party from its obligations under
the Loan Documents or, except in connection with any sales, transfers, leases or
other dispositions permitted in Section 7.03, release any of the Collateral
without the consent of each Lender, or (7) change any of the provisions of this
Section or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent or the Issuing Bank hereunder without the prior written
consent of the Administrative Agent or the Issuing Bank, as the case may be.
Notwithstanding anything to the contrary contained herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent,
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.
SECTION 2. New Lenders and Reallocation of Commitments and Loans. The Lenders
have agreed among themselves to reallocate their respective Commitments and to,
among other

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things, allow a financial institution identified by J.P. Morgan Securities,
Inc., in its capacity as a Lead Arranger, in consultation with the Borrower, to
become a party to the Credit Agreement as a Lender (the “New Lender”) by
acquiring an interest in the Aggregate Commitment, and Administrative Agent and
the Borrower hereby consent to such reallocation and the New Lender’s
acquisition of an interest in the Aggregate Commitment. On the date this
Amendment becomes effective and after giving effect to such reallocation of the
Aggregate Commitment, the Commitment of each Lender shall be as set forth on
Schedule 2.01 of this Amendment which shall amend and restate Schedule 2.01 to
the Credit Agreement in its entirety. With respect to such reallocation, the New
Lender shall be deemed to have acquired the Commitment allocated to it from each
of the other Lenders pursuant to the terms of the Assignment and Assumption
attached as Exhibit A to the Credit Agreement as if the New Lender and the other
Lenders had executed an Assignment and Assumption with respect to such
allocation. The Borrower and Administrative Agent hereby consent to such
assignment to the New Lender. To the extent requested by any Lender in
accordance with Section 2.15 of the Credit Agreement, the Borrower shall pay to
such Lender, within the time period prescribed by Section 2.15 of the Credit
Agreement, any amounts required to be paid by the Borrower under Section 2.15 of
the Credit Agreement in the event the payment of any principal of any Eurodollar
Loan or the conversion of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto is required in connection with the
reallocation contemplated by this Section 2.
SECTION 3. Conditions. The amendments to the Credit Agreement contained in
Section 1 and the assignments and allocations contained in Section 2 of this
Amendment shall be effective upon the satisfaction of each of the conditions set
forth in this Section 3.
     3.1 Execution and Delivery. Each Borrower shall have executed and delivered
this Amendment and any other required documents in form and substance
satisfactory to Administrative Agent.
     3.2 Fees. The Administrative Agent and the Arranger shall have received all
fees payable in the amounts and at the times separately agreed upon among the
Administrative Agent, the Arranger and the Borrower.
     3.3 Representations and Warranties. The representations and warranties of
each Borrower under the Credit Agreement are true and correct in all material
respects as of such date, as if then made (except to the extent that such
representations and warranties relate solely to an earlier date).
     3.4 No Default or Event of Default. After giving effect to this Amendment,
no Default or Event of Default shall have occurred and be continuing.
     3.5 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, and all such documents shall be in
form and substance reasonably satisfactory to the Administrative Agent.

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     3.6 Legal Matters Satisfactory. All legal matters incident to the
consummation of the transactions contemplated hereby shall be reasonably
satisfactory to special counsel for the Administrative Agent retained at the
expense of Borrower.
SECTION 4. 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:
     4.1 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).
     4.2 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.
     4.3 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.
SECTION 5. Miscellaneous.
     5.1 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. 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.
     5.2 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.
     5.3 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.

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     5.4 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. However, this Amendment shall bind no party until each Credit
Party, the Lenders (or at least the required percentage thereof), and the
Administrative Agent have executed a counterpart. 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.
     5.5 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.
     5.6 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.
[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties have caused this Second 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    

Second Amendment to Credit Agreement — Signature Page

 

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                  JPMORGAN CHASE BANK, N.A.,         as a Lender and as
Administrative Agent,    
 
           
 
  By:   /s/ Brian P. Orlando
 
Name: Brian P. Orlando    
 
      Title: Vice President    

     Second Amendment to Credit Agreement — Signature Page

 

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

Second Amendment to Credit Agreement — Signature Page

 

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SCHEDULE 2.01
REVISED LENDERS SCHEDULE

                                              Applicable           Maximum
Lender   Title   Percentage   Commitment1   Commitment
JPMorgan Chase Bank, N.A.

  Administrative Agent     88.8888889 %   $ 40,000,000     $ 40,000,000  
2200 Ross Avenue

  and a Lender
                       
3rd Floor
Mail Code: TX1-2448
Dallas, Texas 75201
Attention: Brian Orlando
Telephone: (214) 965-3245
Facsimile: (214) 965-3280
                               
 
                               
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 %   $ 5,000,000       $5,000,000  
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 %   $ 45,000,000     $ 45,000,000  

 

1   As of the Second Amendment Effective Date.

SCHEDULE 2.01 — Page 1