**Exhibit10.2**

** **

**WAIVER**

 

This WAIVER (“Waiver”),dated as of August 19, 2009, is by and among **PINNACLE GASRESOURCES, INC.**, a Delaware****corporation,the Lenders from time to time party hereto, and **THE ROYALBANK OF SCOTLAND plc**, as Administrative Agent and as Lender.

 

WHEREAS, the Borrower, theLenders and the Administrative Agent are parties to that certain CreditAgreement (as amended by that certain Letter Regarding Waiver and Amendment toCredit Agreement dated March 9, 2007, the Second Amendment to Credit Agreementdated as of August 4, 2008, the Third Amendment to Credit Agreement datedas of September 30, 2008, the Fourth Amendment to Credit Agreement datedas of April 14, 2009, and as further amended and supplemented from time totime, the “Credit Agreement); and

 

WHEREAS, the Borrower hasrequested a waiver under the Credit Agreement in certain respects as set forthherein;

 

NOW THEREFORE, inconsideration of the premises and the mutual covenants, representations andwarranties contained herein, and for other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties heretohereby agree as follows:

 

**AGREEMENT**

** **

Section 1.               Definitions.  Capitalizedterms used herein but not defined herein shall have the meanings as given themin the Credit Agreement, unless the context otherwise requires.

 

Section 2.               Waiver.  TheAdministrative Agent and the Lenders hereby waive for the period ending August 26,2009, the requirement in Section 7.15.2 of the Credit Agreement thatthe Borrower not permit the ratio of its Current Assets to its CurrentLiabilities to be less than 1.00 to 1.00 for the fiscal quarter ending June 30,2009.  The waiver in this Section 2is effective only in respect to such requirement in such Section 7.15.2and only for the period ending August 26, 2009 and only for thefiscal quarter ending June 30, 2009, and not any other period or fiscalquarter and not a waiver of any other provision of the Credit Agreement.  Except as expressly set forth in this Section 2,the execution, delivery, performance and effectiveness of this Waiver shall notoperate nor be deemed to be nor construed as a waiver (i) of any right,power or remedy of the Administrative Agent or any Lender under the CreditAgreement or any of the other Loan Documents, (ii) of any other term,provision, representation, warranty, covenant or event of default contained inthe Credit Agreement, any other Loan Documents or any other instruments ordocuments executed in connection therewith and the Administrative Agent and theLenders hereby expressly reserve all such rights, powers and remedies.

 

Section 3.               Conditions to Effectiveness. This Waiver shall be deemed effective as of June 29, 2009 (the “EffectiveDate”) following the satisfaction of the following condition:

 

(a)           the Administrative Agent shall have receivedcounterparts hereof duly executed by the Borrower, the Administrative Agent,and the Required Lenders;

 

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

 

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

 

(b)           the execution, delivery and performance by theBorrower and each Subsidiary of this Waiver has been duly authorized by allnecessary corporate action required on their part and this Waiver constitutesthe legal, valid and binding obligation of each Obligor party theretoenforceable against them in accordance with its terms, except as itsenforceability may be affected by the effect of bankruptcy, insolvency,reorganization, moratorium or other similar laws now or hereafter in effectrelating to or affecting the rights or remedies of creditors generally;

 

(c)           neither the execution, delivery and performance ofthis Waiver by the Borrower and each Subsidiary, the performance by them of theCredit Agreement nor the consummation of the transactions contemplated herebydoes or shall contravene, result in a breach of, or violate (i) anyprovision of the Borrower or any Subsidiary’s certificate or articles ofincorporation or bylaws or other similar documents, or agreements, (ii) anylaw or regulation, or any order or decree of any court or governmentinstrumentality, or (iii) any indenture, mortgage, deed of trust, lease,agreement or other instrument to which the Borrower or any of its Subsidiariesis a party or by which the Borrower or any of its Subsidiaries or any of theirproperty is bound, except in any such case to the extent such conflict orbreach has been waived herein or by a written waiver document, a copy of whichhas been delivered to Administrative Agent on or before the date hereof;

 

(d)           no Material Adverse Effect has occurred and iscontinuing; and

 

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

 

Section 5.               Costs and Expenses.  As providedin Section 9.4 of the Credit Agreement, the Borrower agrees toreimburse Administrative Agent for all fees, costs, and expenses, including thereasonable fees, costs, and expenses of counsel or other advisors for advice,assistance, or other representation in connection with this Waiver.

 

Section 6.               **GOVERNING LAW****. THIS WAIVER HAS BEENNEGOTIATED, IS BEING EXECUTED AND DELIVERED, AND WILL BE PERFORMED IN WHOLE ORIN PART, IN THE STATE OF NEW YORK, AND THE SUBSTANTIVE LAWS OF SUCH STATE ANDTHE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA SHALL GOVERN THEVALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THE LOAN DOCUMENTS,EXCEPT TO THE EXTENT THE LAWS OF ANY JURISDICTION WHERE COLLATERAL IS**

 

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**LOCATEDREQUIRE APPLICATION OF SUCH LAWS WITH RESPECT TO SUCH COLLATERAL.**

 

Section 7.               Severability. Any provision of this Waiver that is prohibited or unenforceable in anyjurisdiction shall, as to such provision and such jurisdiction, be ineffectiveto the extent of such prohibition or unenforceability without invalidating theremaining provisions of this Waiver or affecting the validity or enforceabilityof such provision in any other jurisdiction.

 

Section 8.               Counterparts. This Waiver may be executed in any number of counterparts, all of whichtaken together shall constitute one and the same instrument, and any partyhereto may execute this Waiver by signing one or more counterparts.  Any signature hereto delivered by a party byfacsimile transmission shall be deemed to be an original signature hereto.

 

Section 9.               No Waiver.  Except asexpressly set forth in this Waiver, the execution, delivery and effectivenessof this Waiver shall not operate as a waiver of any default of the Borrower orany other Obligor or any right, power or remedy of the Administrative Agent orthe other Secured Parties under any of the Loan Documents, nor constitute awaiver of any provision of any of the Loan Documents.

 

Section 10.             Successorsand Assigns.  This Waiver shall be binding upon theBorrower and its successors and permitted assigns and shall inure, togetherwith all rights and remedies of each Lender hereunder, to the benefit of eachLender and the respective successors, transferees and assigns.

 

Section 11.             **Entire Agreement****. THIS WAIVER CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETOWITH RESPECT TO THE SUBJECT HEREOF AND SHALL SUPERSEDE ANY PRIOR AGREEMENTBETWEEN THE PARTIES HERETO, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECTHEREOF.  FURTHERMORE, IN THIS REGARD,THIS AGREEMENT  REPRESENTS THE FINALAGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BYEVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCHPARTIES.**

 

**THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCHPARTIES.**

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, theparties hereto have caused this Waiver to be duly executed and delivered bytheir 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/  P. R. Ballard |
|   | Name:                            | P.  R. Ballard |
|   | Title:                           | Managing  Director |
|        |                                  |  |  |

 

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|   | LENDER:                          |
|--------|----------------------------------|
|   |                             |
|   | THE  ROYAL BANK OF SCOTLAND plc, |
|   |                             |
|   |                             |
|   | By:                              | /s/  P. R. Ballard |
|   | Name:                            | P.  R. Ballard |
|   | Title:                           | Managing  Director |
|        |                                  |  |  |

 

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