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


 


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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.


 


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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]


 


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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

  



 


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  ADMINISTRATIVE
  AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  ROYAL BANK OF SCOTLAND plc,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Lumpkin, Jr.

  
	
   

  	
  Name:

  	
  MARK
  LUMPKIN, JR.

  
	
   

  	
  Title:

  	
  VICE
  PRESIDENT

  



 


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  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  ROYAL BANK OF SCOTLAND plc,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Lumpkin, Jr.

  
	
   

  	
  Name:

  	
  MARK
  LUMPKIN, JR.

  
	
   

  	
  Title:

  	
  VICE
  PRESIDENT

  



 


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