Attached files

file filename
8-K - 8-K - Pinnacle Gas Resources, Inc.a09-32053_18k.htm

Exhibit 10.1

 

SIXTH AMENDMENT TO CREDIT AGREEMENT

 

This SIXTH AMENDMENT TO CREDIT AGREEMENT (“Amendment”), dated as of October 20, 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, 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 and to agree 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.                                            Borrowing Base.  Notwithstanding the provisions of Section 2.8.3 of the Credit Agreement, the Administrative Agent, the Lenders and the Borrower hereby agree that the Borrowing Base under the Credit Agreement has been designated at the following amounts for the following applicable periods (unless such Borrowing Base is hereafter redetermined prior thereto in accordance with Section 2.8.2, 2.8.3, 2.8.4 or 2.8.5, as the case may be, of the Credit Agreement):

 

APPLICABLE PERIOD

 

BORROWING
BASE

 

December 1, 2009 through December 31, 2009

 

$

6,300,000

 

January 1, 2010 through January 31, 2010

 

$

6,100,000

 

February 1, 2010 through February 28, 2010

 

$

5,900,000

 

March 1, 2010 through March 31, 2010

 

$

5,700,000

 

April 1, 2010 through April 30, 2010

 

$

5,500,000

 

 



 

APPLICABLE PERIOD

 

BORROWING
BASE

 

Each calendar month thereafter commencing May 1, 2010

 

the Borrowing Base for the preceding calendar month reduced by $200,000

 

 

Notwithstanding the provisions of Sections 2.8.8 and 3.4.1(c) of the Credit Agreement, if at any time during any of the foregoing applicable periods (unless such Borrowing Base is hereafter redetermined prior thereto in accordance with Section 2.8.2, 2.8.3, 2.8.4 or 2.8.5, as the case may be, of the Credit Agreement), the aggregate Credit Exposure of all Lenders exceeds the Borrowing Base set forth above with respect to such applicable period, then the Borrower shall immediately prepay the Advances in an aggregate principal amount equal to such excess, and if any excess remains after prepaying all of the Advances as a result of a Letter of Credit Outstanding, Cash Collateralize such Letter of Credit Outstanding in an aggregate amount equal to such excess.  Failure to make any such prepayment or to so Cash Collateralize any such Letter of Credit Outstanding shall constitute an immediate Event of Default for all purposes of the Credit Agreement and the other Loan Documents.

 

Section 3.                                            Conditions to Effectiveness.  This Amendment shall be deemed effective as of October 15, 2009 (the “Effective Date”) when the Administrative Agent shall have received counterparts hereof duly executed by the Borrower, the Administrative Agent, and the Required Lenders.

 

Section 4.                                            Representations and Warranties.  The Borrower hereby represents and warrants that after giving effect hereto:

 

(a)                                  the representations and warranties of the Borrower and each Subsidiary contained in the Loan Documents are true and correct in all material respects on and as of the date hereof, other than those representations and warranties that expressly relate solely to a specific earlier date, which shall remain correct in all material respects as of such earlier date;

 

(b)                                 the execution, delivery and performance by the Borrower and each Subsidiary of this Amendment has been duly authorized by all necessary corporate action required on their part and this Amendment, along with the Credit Agreement as amended hereby and other Loan Documents, constitutes the legal, valid and binding obligation of each Obligor party thereto enforceable against them in accordance with its terms, except as its enforceability may be affected by the effect of bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the rights or remedies of creditors generally;

 

(c)                                  neither the execution, delivery and performance of this Amendment by the Borrower and each Subsidiary, the performance by them of the Credit Agreement nor the consummation of the transactions contemplated hereby does or shall contravene, result in a

 

2



 

breach of, or violate (i) any provision of the Borrower or any Subsidiary’s certificate or articles of incorporation or bylaws or other similar documents, or agreements, (ii) any law or regulation, or any order or decree of any court or government instrumentality, or (iii) any indenture, mortgage, deed of trust, lease, agreement or other instrument to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries or any of their property is bound, except in any such case to the extent such conflict or breach has been waived herein or by a written waiver document, a copy of which has been delivered to Administrative Agent on or before the date hereof;

 

(d)                                 no Material Adverse Effect has occurred and is continuing; and

 

(e)                                  no Default or Event of Default that the Administrative Agent and the Lenders have not waived in writing or that has not otherwise been disclosed to the Administrative Agent has occurred and is continuing.

 

Section 5.                                            Ratification.

 

(a)                                  This Amendment shall be deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as hereby amended, and all Obligations in connection therewith, are hereby ratified, approved and confirmed in each and every respect.  On and after the effectiveness of this Amendment in accordance with Section 4 above, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import, referring to the Credit Agreement, and each reference in each other Loan Document to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended or otherwise modified by this Amendment.  This Amendment is a Loan Document.

 

(b)                                 The Borrower and each of its Subsidiaries hereby ratifies, approves and confirms in every respect all the terms, provisions, conditions and obligations of each of the Security Documents, including without limitation all Mortgages, Pledge and Security Agreements, and Guaranties, to which it is a party.

 

Section 6.                                            Costs and Expenses.  As provided in Section 9.4 of the Credit Agreement, the Borrower agrees to reimburse Administrative Agent for all fees, costs, and expenses, including the reasonable fees, costs, and expenses of counsel or other advisors for advice, assistance, or other representation in connection with this Amendment.

 

Section 7.                                            GOVERNING LAW. THIS AGREEMENT HAS BEEN NEGOTIATED, IS BEING EXECUTED AND DELIVERED, AND WILL BE PERFORMED IN WHOLE OR IN PART, IN THE STATE OF NEW YORK, AND THE SUBSTANTIVE LAWS OF SUCH STATE AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THE LOAN DOCUMENTS, EXCEPT TO THE EXTENT THE LAWS OF ANY JURISDICTION WHERE COLLATERAL IS LOCATED REQUIRE APPLICATION OF SUCH LAWS WITH RESPECT TO SUCH COLLATERAL.

 

3



 

Section 8.                                            Severability.  Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Amendment or affecting the validity or enforceability of such provision in any other jurisdiction.

 

Section 9.                                            Counterparts.  This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any party hereto may execute this Amendment by signing one or more counterparts.  Any signature hereto delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.

 

Section 10.                                      No Waiver.  Except as expressly set forth in this Amendment, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any default of the Borrower or any other Obligor or any right, power or remedy of the Administrative Agent or the other Secured Parties under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

 

Section 11.                                      Successors and Assigns.  This Amendment shall be binding upon the Borrower and its successors and permitted assigns and shall inure, together with all rights and remedies of each Lender hereunder, to the benefit of each Lender and the respective successors, transferees and assigns.

 

Section 12.                                      Entire Agreement.  THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND SHALL SUPERSEDE ANY PRIOR AGREEMENT BETWEEN THE PARTIES HERETO, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF.  FURTHERMORE, IN THIS REGARD, THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

 

[Signature Pages Follow]

 

4



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized officers as of the date hereof.

 

 

BORROWER:

 

 

 

 

PINNACLE GAS RESOURCES, INC.

 

 

 

 

 

 

 

By:

/s/ Peter G. Schoonmaker

 

Name:

Peter G. Schoonmaker

 

Title:

Chief Executive Officer and President

 

S-1



 

 

ADMINISTRATIVE AGENT:

 

 

 

 

THE ROYAL BANK OF SCOTLAND plc,

 

 

 

 

 

 

 

By:

/s/ Mark Lumpkin, Jr.

 

Name:

MARK LUMPKIN, JR.

 

Title:

VICE PRESIDENT

 

S-2



 

 

LENDER:

 

 

 

 

THE ROYAL BANK OF SCOTLAND plc,

 

 

 

 

 

 

 

By:

/s/ Mark Lumpkin, Jr.

 

Name:

MARK LUMPKIN, JR.

 

Title:

VICE PRESIDENT

 

S-3