Exhibit 10.1
EXECUTION VERSION
FIFTH AMENDMENT AND WAIVER TO
CREDIT AGREEMENT
This FIFTH AMENDMENT AND WAIVER TO
CREDIT AGREEMENT (“ Amendment ”), dated as of
August 26, 2009, is by and among PINNACLE GAS
RESOURCES, INC. , a Delaware corporation, the Lenders from time
to time party hereto, and THE ROYAL BANK OF SCOTLAND plc ,
as Administrative Agent and as Lender.
WHEREAS, the Borrower, the Lenders
and the Administrative Agent are parties to that certain Credit
Agreement (as amended by that certain Letter Regarding Waiver and
Amendment to Credit Agreement dated March 9, 2007, the Second
Amendment to Credit Agreement dated as of August 4, 2008, the
Third Amendment to Credit Agreement dated as of September 30,
2008, the Fourth Amendment to Credit Agreement dated as of
April 14, 2009, and as further amended and supplemented from
time to time, the “ Credit Agreement ); and
WHEREAS, the parties hereto desire
to amend the Credit Agreement in certain respects as set forth
herein;
NOW THEREFORE, in consideration of
the premises and the mutual covenants, representations and
warranties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
AGREEMENT
Section 1.
Definitions
. Capitalized terms used
herein but not defined herein shall have the meanings as given them
in the Credit Agreement, unless the context otherwise
requires.
Section 2.
Waiver . The Administrative Agent and the Lenders
hereby waive for the period ending October 26, 2009, the
requirement in Section 7.15.2 of the Credit Agreement
that the Borrower not permit the ratio of its Current Assets to its
Current Liabilities to be less than 1.00 to 1.00 for the fiscal
quarter ending June 30, 2009. The waiver in this
Section 2 is effective only for the period ending
October 26, 2009 and only for the fiscal quarter ending
June 30, 2009, and not any other period or fiscal
quarter.
Section 3.
Amendments to Credit
Agreement .
(a)
Section 7.9.2
of the Credit Agreement is amended
by inserting the parenthetical “(or in the case of net sales
proceeds received during the period from June 30, 2009 through
October 26, 2009 5%)” in clause (v) thereof after
the percentage 10% and inserting the phrase “(or in the case
of any such sale between the determination of the Borrowing Base on
April 14, 2009 and the scheduled redetermination of the
Borrowing Base in respect of the Reserve Report to be delivered
within ninety (90) days after June 30, 2009, 2½%) after
the percentage 5% in the proviso of clause
(v) thereof.
(b)
The Administrative Agent and the
Lenders hereby waive for the period ending on October 26, 2009
(herein the “ Waiver Date ”) the requirements of
Section 7.6.2 of the Credit Agreement to the extent and
only to the extent that (i) the failure to pay accounts
payable
within ninety (90) days of the date of the
invoice therefor would cause such accounts not to be Permitted Debt
and (ii) that the aggregate amount of all such accounts
payable not so paid within ninety (90) days of the date of the
invoice therefor does not exceed $6,000,000. The waiver in
this Section 2(b) is effective only to the extent that
such failure to pay accounts payable causes such accounts payable
not to be Permitted Debt and only with respect to the period ending
on the Waiver Date and not any other period and only to the extent
that the aggregate of all such accounts payable not so paid within
ninety (90) days of the date of the invoice therefor does not
exceed $6,000,000.
(c)
The Administrative Agent and the
Lenders hereby waive for the period ending on the Waiver Date the
requirements of Section 7.6.3 of the Credit Agreement
that the Borrower pay the trade and other accounts payable within
90 days after the invoice date therefore, provided that this waiver
is only effective with respect to trade and other accounts not
exceeding $6,000,000 in the aggregate at any time
outstanding. The waiver in this Section 2(c) is
effective only with respect to (i) the period ending on the
Waiver Date and not any other period and (ii) trade and other
accounts not exceeding $6,000,000 in the aggregate at any time
outstanding.
(d)
The Administrative Agent and the
Lenders hereby waive for the period ending on the Waiver Date the
requirements of Section 7.7 of the Credit Agreement
that the Borrower and its Subsidiaries not allow Liens on any of
its Property to the extent but only to the extent of Liens not
securing amounts in excess in the aggregate of $2,500,000.
The waiver in this Section 2(d) is effective only with
respect to (i) the period ending on the Waiver Date and not
any other period and (ii) only with respect to Liens not
securing amounts in excess in the aggregate of
$2,500,000.
Section 4.
Weekly Cash Flow Reports and
Projections . In
addition to financial reports and other certificates, instruments
and deliveries the Borrower is required to deliver to the
Administrative Agent pursuant to the Credit Agreement, commencing
on the date of this Agreement, the Borrower shall (i) deliver
to the Administrative Agent on a weekly basis, in form and
substance satisfactory to the Administrative Agent, (1) a
rolling 13-week cash flow projection that shall detail all sources
and uses of cash on a weekly basis and (2) a comparison of
actual payments to projected line items for the previous period in
reasonable detail, (ii) participate in bi-weekly (or more
frequently as the Administrative Agent may reasonably request)
conference calls with the Administrative Agent, during which a
Financial Officer of the Borrower shall provide the Administrative
Agent with an overview of the financial condition of the Borrower
and a status report as to the status of the Borrower’s
attempts to sell assets, and raise debt and equity and
(iii) shall promptly deliver to th
