Exhibit 10.1
WAIVER AND
AGREEMENT
This WAIVER AND AGREEMENT (“
Agreement ”), dated as of October 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, the Fifth Amendment and Waiver to Credit
Agreement dated as of August 26, 2009 (the “ Fifth
Amendment ”), the Sixth Amendment to Credit Agreement
dated as of October 20, 2009, and as further amended and
supplemented from time to time, the “ Credit Agreement
”); and
WHEREAS, the parties hereto desire
to provide certain waivers with respect to certain provisions of
the Credit Agreement and to make certain agreements 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.
Waivers .
(a)
The Administrative Agent and the
Lenders hereby waive for the period ending on the earlier of
November 16, 2009 and the date of any Default or Event of
Default arising out of any breach of or non-compliance with the
Credit Agreement not expressly waived hereunder (the “
Waiver Date ”), 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 on the Waiver Date and only
for the fiscal quarter ending June 30, 2009, and not any other
period or fiscal quarter.
(b)
The Administrative Agent and the
Lenders hereby waive for the period ending on 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 3.
Modification of Certain
Dates . The
Borrower, Agent and Lenders agree that the references to
“October 26, 2009” and “October 30,
2009”, respectively in Section 4 of the Fifth Amendment
shall be amended and restated to read “November 16,
2009” and “November 30, 2009” respectively.
As amended by the preceding sentences, the provisions of such
Section 4 of the Fifth Amendment shall continue to be
effective from and after the date of this Agreement.
Section 4.
Condition to
Effectiveness .
This Agreement shall be deemed effective as of October 26,
2009 (the “Effective Date”) when the Administrative
Agent shall have rece
