Sixth Amendment to Credit Agreement


 Exhibit 10.1 

SIXTH AMENDMENT TO 

CREDIT AGREEMENT 

SIXTH AMENDMENT, dated as of September 30, 2010 (this “Amendment”), to the Credit Agreement, dated as of
May 15, 2007 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the lenders identified on the signature pages thereof (such lenders, together with their respective
successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), Wells Fargo Capital Finance, Inc. (f/k/a Wells Fargo Foothill, Inc.), a California
corporation, as the arranger and administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), Dune Energy, Inc., a Delaware corporation (“Parent”), and
each of Parent’s Subsidiaries identified on the signature pages thereof as a Borrower (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Borrower”, and individually and collectively,
jointly and severally, as the “Borrowers”), and each of Parent’s Subsidiaries identified on the signature pages thereof as a Guarantor (such Subsidiaries are referred to hereinafter each individually as a
“Guarantor”, and individually and collectively, jointly and severally, as the “Guarantors”; and together with Borrowers, each a “Loan Party” and collectively, the “Loan Parties”).

 WHEREAS, the Loan Parties, the Agent and the Lenders agree to modify the Credit Agreement on and subject to the terms set
forth herein; 
 NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the parties hereto
hereby agree as follows: 
 1. Definitions. Any capitalized term used herein and not defined shall have the meaning
assigned to it in the Credit Agreement. 
 2. Amendments. 

(i) New Definitions. Schedule 1.1 of the Credit Agreement is hereby amended by adding the following definitions, in appropriate
alphabetical order: 
 ““Sixth Amendment” means the Sixth Amendment to Credit Agreement, dated as of
September 30, 2010, among the Borrowers, the Guarantors, the Agent and the Lenders.” 
 ““Sixth
Amendment Effective Date” means the date on which the Sixth Amendment shall become effective in accordance with its terms.” 

(ii) Availability Reserve. Schedule 1.1 of the Credit Agreement is hereby amended by amending and restating the definition of
“Availability Reserve” in its entirety to read as follows: 
 ““Availability Reserve” means
$30,000,000.” 






 (iii) Permitted Dispositions. Schedule 1.1 of the Credit Agreement is hereby amended
by amending and restating the definition of “Permitted Dispositions” in its entirety to read as follows: 

““Permitted Dispositions” means (a) sales or other dispositions of Equipment that is substantially worn,
damaged, or obsolete in the ordinary course of business, (b) sales of Inventory, including Hydrocarbons, to buyers in the ordinary course of business, (c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited
by the terms of the Agreement or the other Loan Documents, (d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business, (e) sales or other
dispositions of the Investments set forth on Schedule P-3, and (f) sales, leases, licenses, assignments, farm-outs, conveyances or other transfers of any Oil and Gas Property (excluding any Oil and Gas Properties constituting Proved
Reserves) or any interest in any Oil and Gas Property (excluding any Oil and Gas Properties constituting Proved Reserves) in the ordinary course of business.” 

(iv) Section 5.22 (Hedging Agreements). Section 5.22 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows: 
 “5.22 Hedging Agreements. Maintain in effect one or more Acceptable
Commodity Hedging Agreements with respect to its Hydrocarbon production, with the aggregate notional volumes of Hydrocarbons covered by such Acceptable Commodities Hedging Agreements constituting not less than 50% and not more than 80% of the
aggregate amount of Borrowers’ estimated Hydrocarbon production volumes on an mcf equivalent basis (where one barrel of oil is equal to six mcf of gas) for the succeeding six calendar months on a rolling six month basis for such period from Oil
and Gas Properties classified as Proved Developed Producing Reserves in the most recent Reserve Report delivered pursuant to Section 5.2 plus the estimated production from anticipated drilling by Loan Parties or their Subsidiaries during
such succeeding six months; provided, such requirements set forth in this Section 5.22 shall not require the Borrowers to include periods past March 31, 2011. The Loan Parties shall use such Acceptable Commodity Hedging
Agreements solely as a part of their normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to their oil and gas operations and not as a means to speculate for investment
purposes on trends and shifts in financial or commodities markets.” 
 (v) Section 6.16(b) (Financial
Covenants). Section 6.16(b) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 

(b) Minimum Net Production. Have aggregate Hydrocarbon production (with one barrel of oil equal to six Mcf of gas) for any
calendar month, calculated on the last day of the calendar month indicated below, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto: 

 

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	 Applicable Amount (Mcf)
	  	 Calendar Month

	 522,435
	  	August 31, 2010
	 456,663
	  	September 30, 2010
	 510,634
	  	October 31, 2010
	 493,696
	  	November 30, 2010
	 519,070
	  	December 31, 2010
	 506,323
	  	January 31, 2011
	 465,377
	  	February 28, 2011

 4.
Conditions to Effectiveness. The effectiveness of this Amendment is subject to the fulfillment, in a manner satisfactory to the Agent and the Lenders, of each of the following conditions precedent (the date such conditions are fulfilled or
waived by the Agent and the Lenders is hereinafter referred to as the “Sixth Amendment Effective Date”): 

(a) Representations and Warranties; No Event of Default. The representations and warranties herein, in Section 4 of the
Credit Agreement and in each other Loan Document and certificate or other writing delivered to the Agent and the Lenders pursuant hereto on or prior to the Sixth Amendment Effective Date shall be true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) after giving effect to this Amendment on and as of the Sixth Amendment Effective
Date as though made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date), and no Default or Event of Default shall have occurred and be continuing on the Sixth Amendment Effective Date
or would result from this Amendment becoming effective in accordance with its terms (except as expressly waived herein). 
 (b)
Execution of Amendment. The Agent and the Lenders shall have executed this Amendment and shall have received a counterpart to this Amendment, duly executed by the Borrowers and each Guarantor. 

(c) Amendment Fee. Borrower shall have paid to the Agent, for its sole and separate account and not the account of any Lender, an
amendment fee of $500,000 in immediately available funds. Such amendment fee shall be fully earned and non-refundable on the date hereof. 

(d) Other Agreements. The Agent shall have received such other agreements, instruments, approvals and other documents, each
reasonably satisfactory to the Agent in from and substance, as the Agent may reasonably request. 
 5. Representations and
Warranties. Each of the Borrowers and the Guarantors represents and warrants as follows: 
  

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 (a) The execution, delivery and performance by the Borrowers or such Guarantor of this
Amendment (including, without limitation, Section 5) and the performance by the Borrowers or such Guarantor of the Credit Agreement, as amended hereby, have been duly authorized by all necessary action, and the Borrowers or such Guarantor has
all requisite power, authority and legal right to execute, deliver and perform this Amendment (including, without limitation, Section 5) and to perform the Credit Agreement, as amended hereby. 

(b) This Amendment and the Credit Agreement, as amended hereby, is a legal, valid and binding obligation of the Borrowers or such
Guarantor, enforceable against the Borrowers or such Guarantor in accordance with the terms thereof, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors’ rights generally. 
 (c) The representations and warranties contained in Section 4 of the
Credit Agreement are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) after
giving effect to this Amendment on and as of the Sixth Amendment Effective Date as though made on and as of the Sixth Amendment Effective Date (except to the extent such representations and warranties expressly relate to an earlier date), and no
Event of Default or Default has occurred and is continuing on and as of the Sixth Amendment Effective Date, or would result from this Amendment becoming effective in accordance with its terms (except as expressly waived herein). 

6. Release. Each of the Borrowers and the Guarantors may have certain Claims against the Released Parties, as those terms are
defined below, regarding or relating to the Credit Agreement or the other Loan Documents. The Agent, the Lenders, the Borrowers and the Guarantors desire to resolve each and every one of such Claims in conjunction with the execution of this
Amendment and thus each of the Borrowers and the Guarantors makes the releases contained in this Section 6. In consideration of the Agent and the Lenders entering into this Amendment and agreeing to substantial concessions as set forth herein,
each of the Borrowers and the Guarantors hereby fully and unconditionally releases and forever discharges each of the Agent and the Lenders, and their respective directors, officers, employees, subsidiaries, branches, affiliates, attorneys, agents,
representatives, successors and assigns and all persons, firms, corporations and organizations acting on any of their behalves (collectively, the “Released Parties”), of and from any and all claims, allegations, causes of action,
costs or demands and liabilities, of whatever kind or nature, from the beginning of the world to the date on which this Amendment is executed, whether known or unknown, liquidated or unliquidated, fixed or contingent, asserted or unasserted,
foreseen or unforeseen, matured or unmatured, suspected or unsuspected, anticipated or unanticipated, which the Borrowers or the Guarantors has, had, claims to have had or hereafter claims to have against the Released Parties by reason of any act or
omission on the part of the Released Parties, or any of them, occurring prior to the date on which this Amendment is executed, including all such loss or damage of any kind heretofore sustained or that may arise as a consequence of the dealings
among the parties up to and including the date on which this Amendment is executed, including the administration or enforcement of the Advances, the Obligations, the Credit Agreement or any of the Loan Documents (collectively, all of the foregoing,
the “Claims”). Each of the Borrowers and the Guarantors represents and warrants that it has no knowledge of any claim by it against the 

 

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Released Parties or of any facts or acts of omissions of the Released Parties which on the date hereof would be the basis of a claim by the Borrowers or the Guarantors against the Released
Parties which is not released hereby. Each of the Borrowers and the Guarantors represents and warrants that the foregoing constitutes a full and complete release of all Claims. 

7. Miscellaneous. 

(a) Continued Effectiveness of the Credit Agreement. Except as otherwise expressly provided herein, the Credit Agreement and the
other Loan Documents are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, except that on and after the Sixth Amendment Effective Date (i) all references in the Credit Agreement to
“this Agreement”, “hereto”, “hereof”, “hereunder” or words of like import referring to the Credit Agreement shall mean the Credit Agreement as amended by this Amendment, and (ii) all references in the
other Loan Documents to the “Credit Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Credit Agreement shall mean the Credit Agreement as amended by this Amendment. To the
extent that the Credit Agreement or any other Loan Document purports to pledge to Agent, or to grant to Agent, a security interest or lien, such pledge or grant is hereby ratified and confirmed in all respects. Except as expressly provided herein,
the execution, delivery and effectiveness of this Amendment shall not operate as an amendment of any right, power or remedy of the Agent and the Lenders (including the Issuing Lender) under the Credit Agreement or any other Loan Document, nor
constitute an amendment of any provision of the Credit Agreement or any other Loan Document. 
 (b) Counterparts. This
Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of this Amendment by telefacsimile or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Amendment. 

(c) Headings. Section headings herein are included for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose. 
 (d) Costs and Expenses. The Borrowers agree to pay on demand all reasonable fees,
costs and expenses of the Agent and the Lenders in connection with the preparation, execution and delivery of this Amendment. 

(e) No Waivers. Except as otherwise expressly provided herein, this Amendment is not a waiver of, or consent to, any Default or
Event of Default now existing or hereafter arising under the Credit Agreement or any other Loan Document and the Agent and the Lenders expressly reserve all of their rights and remedies under the Credit Agreement and the other Loan Documents in
respect of all such Defaults or Events of Default not waived or consented to hereby, under applicable law or otherwise. 
  

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 (f) Amendment as Loan Document. The Borrowers and each Guarantor hereby acknowledge
and agree that this Amendment constitutes a “Loan Document” under the Credit Agreement. Accordingly, it shall be an Event of Default under the Credit Agreement if (i) any representation or warranty made by the Borrowers or any
Guarantor under or in connection with this Amendment shall have been untrue, false or misleading in any material respect when made, or (ii) the Borrowers or any Guarantor shall fail to perform or observe any term, covenant or agreement
contained in this Amendment. 
 (g) Governing Law. This Amendment shall be governed by the laws of the State of New
York. 
 (h) Waiver of Jury Trial. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. 

[Remainder of this Page Intentionally Left Bank] 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and
delivered as of the date first above written. 
  

			
	BORROWERS:
	
	 DUNE ENERGY, INC.,

a Delaware corporation

		
	By:	 	/s/ James A. Watt
	Name:	 	James A. Watt
	Title:	 	President & Chief Executive Officer
	
	 DUNE PROPERTIES, INC., 

a Texas corporation

		
	By:	 	/s/ James A. Watt
	Name:	 	James A. Watt
	Title:	 	President & Director
	
	 VAQUERO PARTNERS LLC, 

a Texas limited liability company

		
	By:	 	/s/ James A. Watt
	Name:	 	James A. Watt
	Title:	 	President & Manager
	
	GUARANTORS:
	
	 DUNE OPERATING COMPANY, 

a Texas corporation

		
	By:	 	/s/ James A. Watt
	Name:	 	James A. Watt
	Title:	 	President & Director
	
	 DUNE GC HOLDINGS, INC., 

a Delaware corporation

		
	By:	 	/s/ James A. Watt
	Name:	 	James A. Watt
	Title:	 	President & Director


  







			
	AGENT AND LENDER:
	
	 WELLS FARGO CAPITAL FINANCE, INC.,

a California corporation, as Agent and as a Lender

		
	By:	 	/s/ Gary Forlenza
	Name:	 	Gary Forlenza
	Title:	 	Vice President