Exhibit 10.4


 


EXECUTION VERSION


  


THIRD
AMENDMENT TO CREDIT AGREEMENT


  


This
THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of March 27, 2018 (the “Effective
Date”), among CARBON NATURAL GAS COMPANY, a Delaware corporation (“Borrower”), each of the Subsidiaries
party hereto (collectively, the “Guarantors” and each a “Guarantor”), the Lenders party hereto,
and LEGACYTEXAS BANK, as administrative agent for the Lenders (in such capacity, “Administrative Agent”).


 


R
E C I T A L S:


 


WHEREAS,
Borrower, the financial institutions from time to time party thereto (the “Lenders”), and Administrative Agent
are parties to that certain Credit Agreement dated as of October 3, 2016 (as amended, restated or otherwise modified from time
to time, the “Credit Agreement”);


 


WHEREAS,
Borrower has advised Administrative Agent and the Lenders that an Event of Default has occurred or may occur under the Credit
Agreement as the result of Borrower’s failure to comply with (i) the Leverage Ratio set forth in Section 9.1 of the
Credit Agreement, and (ii) the Current Ratio set forth in Section 9.2 of the Credit Agreement, each for the fiscal quarter
ending December 31, 2017 (the foregoing Events of Default, the “Specified Defaults”);


 


WHEREAS,
Borrower has requested Administrative Agent and the Lenders agree to amend the Credit Agreement as hereinafter provided and waive
the Specified Defaults, and, subject to the terms and conditions set forth herein, Administrative Agent and the Lenders are willing
to agree to such amendments and limited waiver, all as hereinafter provided; and


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:


 


Section
1.Defined Terms. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the
Credit Agreement.


 


Section
2.Amendments to Credit Agreement.


 


(a) The
follow definitions are hereby added to Section 1.1 of the Credit Agreement in the proper alphabetical order to read in their entirety
as follows:


 


“Adjusted
EBITDA” means, with respect to Borrower and its Subsidiaries on a consolidated basis as of any applicable date of determination
thereof, an amount equal to (a) EBITDA, plus without duplication (b) reimbursements of general and administrative
expenses that were paid by Borrower for the benefit of Carbon Appalachia Enterprises, LLC and Carbon California Company, LLC as
of the most recently ended fiscal quarter, annualized by taking such amount and multiplying it by 4.


 


“Liquidity”
means, with respect to Borrower and its Subsidiaries on a consolidated basis as of any date of determination thereof, the sum
of unencumbered cash and cash equivalents; provided, however, solely for the purpose of this calculation, cash and
cash equivalents pledged in favor of the Administrative Agent in connection with the Loan Documents shall not constitute as encumbered.


  



    	LIMITED CONSENT– Page 1 



     


    

 


“Net
Debt” means, on any date of determination, (a) all Debt of Borrower and its Subsidiaries, on a consolidated basis, as
of such date, minus (b) all unencumbered cash and cash equivalents of the Borrower and the Subsidiaries, on a consolidated
basis, as of such date in accordance with GAAP; provided, however, solely for the purpose of this calculation, cash
and cash equivalents pledged in favor of the Administrative Agent in connection with the Loan Documents shall not constitute as
encumbered.


 


(b) The
definition of “EBITDA” in Section 1.1 of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:


 


“EBITDA”
means, with respect to Borrower and its Subsidiaries on a consolidated basis as of any applicable date of determination thereof
and for any Test Period, an amount equal to (a) Net Income (excluding any non-cash revenue or expense associated with Hedging
Agreements resulting from ASC 815 and any non-cash charges attributable to the application of ASC 410), plus without duplication
(b) the sum of the following to the extent deducted in the calculation of Net Income: (i) interest expense; (ii) income
taxes; (iii) depreciation; (iv) depletion; (v) amortization; (vi) extraordinary losses determined in accordance
with GAAP; (vii) other non-recurring expenses reducing such Net Income which do not represent a cash item in such Test Period
or any future period; (viii) all other non-cash charges and credits to income including ceiling test impairments under full cost
accounting; (ix) fees paid to the Lenders, L/C Issuer, and Administrative Agent under this Agreement; (x) transaction-related
costs and expenses with respect to this Agreement and the Intercreditor Agreement; and (xi) losses on the sale of assets,
plus without duplication (c) cash distributions paid by either Carbon Appalachia Enterprises, LLC or Carbon California
Company, LLC to Borrower for the same period in which such distributions were received, minus without duplication (d) the
sum of the following to the extent included in the calculation of Net Income: (i) income tax credits; (ii) extraordinary
gains determined in accordance with GAAP; (iii) gains on the sale of assets; and (iv) all non-recurring, non-cash items increasing
Net Income.


 


(c) The
definition of “Leverage Ratio” in Section 1.1 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:


 


“Leverage
Ratio” means, as of any date of determination thereof, the ratio of (a) Net Debt of Borrower and its Subsidiaries, on
a consolidated basis in accordance with GAAP, as of such date to (b) Adjusted EBITDA of Borrower and its Subsidiaries, on a consolidated
basis, for the Test Period most recently ended.


 


(d) The
definition of “Test Period” in Section 1.1 of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:


 


“Test
Period” means, as of any date of determination thereof, the four consecutive fiscal quarters of Borrower most recently
ended (in each case taken as one accounting period) for which financial statements have been or are required to be delivered pursuant
to this Agreement; provided, however, for purposes of the calculation of EBITDA (including Net Income and each other
amount included in the determination of EBITDA) for Test Period ending March 31, 2018, such amounts shall be annualized by taking
the results of the fiscal quarter ending March 31, 2018, and multiplying them by 4; for the Test Period ending June 30, 2018,
such amounts shall be annualized by taking the results of the two fiscal quarters ending June 30, 2018, and multiplying them by
2; for the Test Period ending September 30, 2018, such amounts shall be annualized by taking the results of the three fiscal quarters
ending September 30, 2018, and multiplying them by 4/3; and for the Test Period ending December 31, 2018 and for each Test Period
thereafter, such amount shall be the sum of the results of the four consecutive fiscal quarters of Borrower most recently ended.


 



    	 THIRD
                                         AMENDMENT TO CREDIT AGREEMENT – Page 2



     


    

 


(e) Section
7.1(p) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:


 


(p) Accounts
Aging Report. Concurrently with the delivery of each of the financial statements referred to in Sections 7.1(a)
and 7.1(b), a report setting forth all accounts receivable and accounts payable of Borrower as of the date of such delivery,
such report to show the age of such accounts and such other information as Administrative Agent shall reasonably request;


 


(f) Section
9.2 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:


 


9.2 Maximum
Account Payable Aging. Borrower shall not permit, as of the end of any fiscal quarter, commencing with fiscal quarter ending
March 31, 2018, the aggregate balance of all trade account payable more than 90 days past due from the date on which such trade
account payable was created to be greater than $150,000; provided, however, trade account payables that are being
contested in good faith by appropriate proceedings and adequate reserves for such items have been made in accordance with GAAP
shall be excluded from the calculation for the purpose of this Section 9.2.


 


(g) A
new Section 9.3 is hereby added to the Credit Agreement to read in its entirety as follows:


 


9.3 Maximum
Accrued Current Liabilities. Borrower shall not permit, as of the end of any fiscal quarter, commencing with fiscal quarter
ending March 31, 2018, the accrued current liabilities of Borrower and its Subsidiaries (excluding any trade account payable,
accruals for revenue suspense and accruals for asset retirement obligations) to be greater than 70% of the sum of (a) current
assets of Borrower and its Subsidiaries, plus (b) Revolving Credit Availability, calculated on a consolidated basis as
determined in accordance with GAAP.


 


(h) A
new Section 9.4 is hereby added to the Credit Agreement to read in its entirety as follows:


 


9.4 Minimum
Liquidity. Borrower shall not permit, as of the end of any fiscal quarter, commencing with fiscal quarter ending March 31,
2018, its Liquidity to be less than $750,000.


 


(i) Exhibit
B to the Credit Agreement is hereby amended and replaced in its entirety with the Exhibit B attached to this Amendment hereto.


  



    	 THIRD
                                         AMENDMENT TO CREDIT AGREEMENT – Page 3



     


    

 


Section
3.Limited Waiver.


 


(a) Specified
Defaults; Limited Waiver. Borrower has requested that Administrative Agent and the Lenders waive the Specified Defaults. Subject
to the terms and conditions of this Amendment, Administrative Agent and the Lenders hereby waive the Specified Defaults (the “Limited
Waiver”).


 


(b) No
Other Waiver. Except as expressly stated herein, the Limited Waiver shall not be construed as a consent to or waiver of any
default or breach which may now exist or hereafter occur or any violation of any term, covenant or provision of the Credit Agreement
or any other Loan Document. All rights and remedies of the Administrative Agent and the Lenders are hereby expressly reserved
with respect to any such default or breach. The Limited Waiver does not affect or diminish the right of the Administrative Agent
and the Lenders to require strict performance by Borrower or any other Obligated Party of each provision of any Loan Document
to which it is a party, except as expressly provided herein, and shall not be construed as a course of dealing among the Administrative
Agent, the Lenders and any Obligated Party. All terms and provisions of, and all rights and remedies of the Administrative Agent
and the Lenders under, the Loan Documents shall continue in full force and effect and are hereby confirmed and ratified in all
respects.


 


Section
4.Effectiveness. Upon the satisfaction of the following conditions precedent, this Amendment shall become effective
as of the Effective Date:


 


(a) the
Administrative Agent shall have received counterparts to this Amendment duly executed by a duly authorized officer of the Borrower,
the Guarantors and the Lenders; and


 


(b) the
Administrative Agent shall have received reimbursement for all of its reasonable out-of-pocket costs and expenses incurred by
it in connection with this Amendment and any other documents prepared in connection herewith, that have been invoiced prior to
the Effective Date, including, without limitation, the reasonable fees, charges and disbursements of counsel to the Administrative
Agent.


 


Section
5.Acknowledgment and Ratification. As a material inducement to Administrative Agent and the Lenders to execute and
deliver this Amendment, each of Borrower and the Guarantors acknowledges and agrees that (a) the execution, delivery, and performance
of this Amendment shall, except as expressly provided herein, in no way release, diminish, impair, reduce, or otherwise affect
the obligations of such Person under the Loan Documents to which such Person is a party, (b) each Loan Document to which such
Person is a party shall remain in full force and effect and shall each continue to be the legal, valid and binding obligations
of such Person enforceable against such Person in accordance with its terms, and (c) it has no claims or offsets against, or defenses
or counterclaims to, any of the Loan Documents.


 


Section
6.Representations and Warranties. As a material inducement to Administrative Agent and the Lenders to execute
and deliver this Amendment, each of Borrower and the Guarantors represents and warrants to Administrative Agent and the Lenders
(with the knowledge and intent that Administrative Agent and the Lenders are relying upon the same in entering into this Amendment)
that as of the date of such Person’s execution of this Amendment:


 


(a) this
Amendment, the Credit Agreement and each of the other Loan Documents to which such Person is a party (i) have each been duly executed
and delivered by such Person and (ii) constitute the valid and binding obligations of such Person, enforceable against such Person
in accordance with their respective terms, except as enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or similar laws affecting the enforcement of creditor’s rights, generally and by
general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity);


  



    	 THIRD
                                         AMENDMENT TO CREDIT AGREEMENT – Page 4



     


    

 


(b) the
representations and warranties set forth in the Credit Agreement and the other Loan Documents to which such Person is a party
are true and correct, after giving effect to this Amendment, as if made on and as of the date of this Amendment, except to the
extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct
as of such earlier date;


 


(c) at
the time of and after giving effect to this Amendment, no Default or Event of Default exists; and


 


(d) the
execution, delivery and performance of this Amendment (i) with respect to Borrower, have been duly authorized by all requisite
action on the part of Borrower, (ii) are not in contravention of any Law applicable to such Person or, with respect to Borrower,
the terms of Borrower’s Constituent Documents and (iii) except as have been previously obtained or as referred to in Section 6.8
of the Credit Agreement, do not require the consent or approval of any Governmental Authority or any other third party.


 


Section
7.Administrative Agent and Lenders Make No Representations or Warranties. By execution of this Amendment, neither Administrative
Agent nor any Lender (a) makes any representation or warranty or assumes any responsibility with respect to any statements,
warranties, or representations made in or in connection with the Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency, or value of this Amendment, the Credit Agreement, the Loan Documents or any other instrument or document
furnished pursuant hereto or thereto, or (b) makes any representation or warranty or assumes any responsibility with respect
to the financial condition of Borrower, the Guarantor or any other Person or the performance or observance by such Persons of
any of their obligations under the Loan Documents or any other instrument or document furnished pursuant thereto.


 


Section
8.Effect of Amendment. This Amendment (a) except as expressly provided herein, shall not be deemed to be a consent
to the modification or waiver of any other term or condition of the Credit Agreement, the other Loan Documents or any of the instruments
or agreements referred to therein, (b) shall not prejudice any right or rights which Administrative Agent or the Lenders
may now or hereafter have under or in connection with the Credit Agreement or any other Loan Document, including, without limitation,
the right to accelerate the Obligations, institute foreclosure proceedings, exercise their respective rights under the UCC or
other applicable Law, and/or institute collection proceedings against Borrower, any Guarantor, or any other Obligated Party, to
the extent provided therein or by Law, and (c) except as expressly provided herein, shall not be deemed to be a waiver of
any existing or future Default or Event of Default under the Credit Agreement or any other Loan Document.


 


Section
9.Miscellaneous. This Amendment shall be governed by, and construed in accordance with, the Laws of the State of Texas.
The captions in this Amendment are for convenience of reference only and shall not define or limit the provisions hereof. This
Amendment, and any documents required or requested to be delivered pursuant to Section 4 hereof, may be delivered
by telecopy or pdf transmission of the relevant signature pages hereof and thereof, as applicable.


 


Section
10.Ratification. Each of Borrower and the Guarantors ratifies and acknowledges the Loan Documents to which such Person
is a party are valid, subsisting and enforceable against such Person.


  



    	 THIRD
                                         AMENDMENT TO CREDIT AGREEMENT – Page 5



     


    

 


Section
11.Release. Borrower acknowledges that on the date hereof all outstanding Obligations are payable in accordance with
their terms, and Borrower (i) waives any defense, offset, counterclaim or recoupment with respect thereto and (ii) releases
and discharges the Administrative Agent and Lenders and their officers, directors, employees, agents, shareholders, affiliates
and attorneys (the “Released Parties”) from any and all obligations, indebtedness, liabilities, claims, rights,
causes of action or other demands whatsoever, whether known or unknown, suspected or unsuspected, in law or equity, which Borrower
ever had, now has or claims to have or may have against any Released Party arising prior to the Effective Date.


 


Section
12.Incorporation of Certain Provisions by Reference. The provisions of Section 12.12 of the Credit Agreement
captioned “Governing Law; Venue; Service of Process” and Section 12.18 of the Credit Agreement captioned
“WAIVER OF JURY TRIAL” are incorporated herein by reference for all purposes.


 


Section
13.Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which
when taken together shall constitute but one and the same instrument. For purposes of this Amendment, a counterpart hereof (or
signature page thereto) signed and transmitted by any Person party hereto to the Administrative Agent (or its counsel) by facsimile
machine, telecopier or electronic mail is to be treated as an original. The signature of such Person thereon, for purposes hereof,
is to be considered as an original signature, and the counterpart (or signature page thereto) so transmitted is to be considered
to have the same binding effect as an original signature on an original document. In proving this Amendment, it shall not be necessary
to produce or account for more than one such counterpart.


 


Section
14.NOTICE OF FINAL AGREEMENT. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.


 


[Remainder
of page intentionally left blank. Signature Pages follow.] 



    	 THIRD
                                         AMENDMENT TO CREDIT AGREEMENT – Page 6



     


    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective proper and
duly authorized officers as of the day and year first above written.


  


	 	BORROWER:
	 	 
	 	CARBON NATURAL GAS COMPANY
	 	 
	 	By:	/s/
    Patrick R. McDonald
	 	 	Patrick R. McDonald
	 	 	Chief Executive Officer
	 	 
	 	GUARANTORS:
	 	 
	 	NYTIS EXPLORATION COMPANY LLC
	 	 
	 	By: 	Nytis Exploration (USA) Inc.,
	 	 	its sole Manager
	 	 
	 	 	By:	/s/
    Patrick R. McDonald
	 	 	 	Patrick R. McDonald
	 	 	 	Chief Executive Officer
	 	 
	 	NYTIS EXPLORATION (USA) INC.
	 	 
	 	By:	/s/
    Patrick R. McDonald
	 	 	Patrick R. McDonald
	 	 	Chief Executive Officer
	 	 
	 	CARBON CALIFORNIA OPERATING COMPANY,
    LLC
	 	 
	 	By:	/s/
    Patrick R. McDonald
	 	 	Patrick R. McDonald
	 	 	President




 



     


     


    

 


	 	ADMINISTRATIVE AGENT:
	 	 
	 	LEGACYTEXAS BANK
	 	 
	 	By:	/s/ Whitney Randolph
	 	 	Whitney Randolph
	 	 	Senior Vice President
	 	 
	 	LENDERS:
	 	 
	 	LEGACYTEXAS BANK
	 	 
	 	By:	/s/ Whitney Randolph
	 	 	Whitney Randolph
	 	 	Senior Vice President




  



     


     


    

 


EXHIBIT
B


 


Compliance
Certificate


 


	FOR QUARTER/YEAR ENDED	_______________________ (the “Subject Period”)
	 	 
	ADMINISTRATIVE AGENT:	LegacyTexas Bank
	 	 
	BORROWER:	Carbon Natural Gas Company 




 


This
Compliance Certificate (this “Certificate”) is delivered under the Credit Agreement (the “Credit Agreement”)
dated as of October 3, 2016, by and among Borrower, the Lenders from time to time party thereto and Administrative Agent. Capitalized
terms used in this Certificate shall, unless otherwise indicated, have the meanings set forth in the Credit Agreement. The undersigned
hereby certifies to Administrative Agent and Lenders as of the date hereof that: (a) he/she is the ___________________ of
Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to Administrative Agent on behalf of
Borrower; (b) he/she has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be
made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of Borrower during
the Subject Period; (c) during the Subject Period, Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it and no Default or Event of Default currently exists or has occurred which has not been cured or waived
by Required Lenders or all Lenders, as required by the Loan Documents; (d) the representations and warranties of Borrower
contained in Article 6 of the Credit Agreement, and any representations and warranties of Borrower that are contained
in any document furnished at any time under or in connection with the Loan Documents, are true and correct on and as of the date
hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they
are true and correct as of such earlier date, and except that for purposes of this Certificate, the representations and warranties
contained in Section 6.2 of the Credit Agreement shall be deemed to refer to the most recent statements furnished
pursuant to Section 7.1 of the Credit Agreement, including the statements in connection with which this Certificate
is delivered; (e) the financial statements of Borrower attached to this Certificate were prepared in accordance with GAAP,
and present, on a consolidated basis, fairly and accurately the financial condition and results of operations of Borrower and
its Subsidiaries as of the end of and for the Subject Period; (f) the update to Schedule 6.29 attached hereto sets
forth a complete and correct list of all Hedging Agreements and Hedging Transactions in effect or to be in effect as of the date
hereof, the material terms thereof (including the type, term, effective date, termination date and notional amounts or values),
the Hedge Termination Value thereof, and the counterparty thereto; (g) the financial covenant analyses and information set
forth below are true and accurate on and as of the date of this Certificate; and (h) the status of compliance by Borrower
with certain covenants of the Credit Agreement at the end of the Subject Period is as set forth below:


 


	 	 	In Compliance as of

    End of Subject Period

    (Please Indicate)
	1.	Financial Statements and Reports	 	 
	 	 	 	 
	 	(a)	Provide annual audited FYE financial statements within

90 days after the last day of each fiscal year.	Yes	No
	 	 	 	 	 
	 	(b)	Provide quarterly financial statements within 60 days after the 

last day of each fiscal quarter.	Yes	No
	 	 	 	 	 
	 	(c)	Provide other required reporting timely.	Yes	No
	 	 	 	 	 
	2.	Subsidiaries 

None, except as listed on Schedule 6.13.	Yes	No
	 	 	 	 
	3.	Debt

None, except Debt permitted by Section 8.1 of the Credit Agreement.	Yes	No
	 	 	 	 
	4.	Liens

None, except Liens permitted by Section 8.2 of the Credit Agreement.	Yes	No
	 	 	 	 
	5.	Acquisitions and Mergers

None, except those permitted by Section 8.3 of the Credit Agreement.	Yes	No
	 	 	 	 
	6.	Dividends and Stock Repurchase

None, except as permitted by Section 8.4 of the Credit Agreement.

(if applicable, Dollar amount during Subject Period:  $_____)	Yes	No
	 	 	 	 
	7.	Loans and Investments

None, except those permitted by Section 8.5 of the Credit Agreement.	Yes	No
	 	 	 	 
	8.	Issuance of Equity

None, except issuances permitted by Section 8.6 of the Credit Agreement.	Yes	No
	 	 	 	 
	9.	Affiliate Transactions

None, except transactions permitted by Section 8.7 of the Credit Agreement.	Yes	No




  



    	Ex B-1



     


    

  


	 	 	In Compliance as of

    End of Subject Period

    (Please Indicate)
	 	 	 
	10.	Dispositions of Assets

None, except Dispositions permitted by Section 8.8 of the Credit Agreement.	Yes	No
	 	 	 	 
	11.	Sale and Leaseback Transactions

None, except transactions permitted by Section 8.9 of the Credit Agreement.	Yes	No
	 	 	 	 
	12.	Prepayment of Debt

None, except prepayments permitted by Section 8.10 of the Credit Agreement.	Yes	No
	 	 	 	 
	13.	Changes in Nature of Business

None, except changes permitted by Section 8.11 of the Credit Agreement.	Yes	No
	 	 	 	 
	14.	Environmental Protection

No activity likely to cause violations of Environmental Laws or create any Environmental Liabilities.	Yes	No
	 	 	 	 
	15.	Changes in Fiscal Year; Accounting Practices

None, except transactions permitted by Section 8.13 of the Credit Agreement.	Yes	No
	 	 	 	 
	16.	No Negative Pledge

None, except those permitted by Section 8.14 of the Credit Agreement.	Yes	No
	 	 	 	 
	17.	Hedging Agreements, Transactions and Terminations

None, except those permitted by Section 8.17 of the Credit Agreement.	Yes	No
	 	 	 	 
	18.	Gas Balancing Agreements and Advance Payment Contracts

None, except those permitted by Section 8.18 of the Credit Agreement.	Yes	No
	 	 	 	 
	19.	Amendments to JOAs

None, except those permitted by Section 8.21 of the Credit Agreement.	Yes	No
	 	 	 	 
	20.	
        Leverage Ratio

        Maximum of 3.50 to 1.00 at end of Subject Period (defined as Net Debt divided by Adjusted EBITDA; calculated for the Test Period
        then ended).

        _____________÷ _________________= ____________

        Net Debt                 Adjusted EBITDA 
	Yes	No
	 	 	 	 
	21.	Account Payable Aging

Aggregate balance on account payable aging more than 90 days past due to be no greater than $150,000.	Yes	No
	 	 	 	 
	22.	
        Accrued Current Liabilities

        Accrued current liability (excluding any trade account
payable, accruals for revenue suspense and accruals for asset retirement obligations) shall not exceed 70% of current assets plus
Revolving Credit Availability (calculated on a consolidated basis in accordance with GAAP).
	Yes	No
	 	 	 	 
	23.	
        Minimum Liquidity

        Liquidity shall not be less than $750,000 during any fiscal
        quarter
	Yes	No




 


 


Ex B-2