Exhibit 10.1
July 10, 2009
BNP Paribas, as Lender and Administrative Agent
787 Seventh Avenue
New York, NY 10019
Deutsche Bank Trust Company Americas, as Collateral Agent and Depositary Agent
60 Wall Street, 27th Floor
Mail Stop: NYC60-2710
New York, NY 10005
The Lender parties to the Credit
Agreement (as defined below)
Re:
Limited Consent, Waiver and Forbearance under
the Credit Agreement and Account Agreement (each as defined below)
Ladies and Gentlemen:
1.
THIS REQUEST FOR LIMITED CONSENT, WAIVER
AND FORBEARANCE (THIS "CONSENT") IS DELIVERED TO YOU PURSUANT TO (I) THAT
CERTAIN CREDIT AGREEMENT, DATED AS OF SEPTEMBER 25, 2006 (AS AMENDED,
SUPPLEMENTED AND MODIFIED FROM TIME TO TIME, THE "CREDIT AGREEMENT"), AMONG BFE
OPERATING COMPANY, LLC ("OPCO"), BUFFALO LAKE ENERGY, LLC ("BUFFALO LAKE"),
PIONEER TRAIL ENERGY, LLC ("PIONEER TRAIL" AND, TOGETHER WITH OPCO AND BUFFALO
LAKE, THE "BORROWERS"), OPCO, AS BORROWERS' AGENT (THE "BORROWERS' AGENT"), THE
LENDERS PARTY THERETO, BNP PARIBAS, AS ADMINISTRATIVE AGENT AND ARRANGER, AND
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS COLLATERAL AGENT AND (II) THAT CERTAIN
COLLATERAL ACCOUNT AGREEMENT, DATED AS OF SEPTEMBER 25, 2006 (AS AMENDED,
SUPPLEMENTED AND MODIFIED FROM TIME TO TIME, THE "ACCOUNT AGREEMENT"), AMONG THE
BORROWERS, THE BORROWERS' AGENT, THE COLLATERAL AGENT, AND DEUTSCHE BANK TRUST
COMPANY AMERICAS, AS THE DEPOSITARY AGENT (THE "DEPOSITARY AGENT").
ALL
CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE MEANINGS
ASSIGNED TO SUCH TERMS IN THE CREDIT AGREEMENT.
2.
THE BORROWERS HAVE ACKNOWLEDGED HAVING
RECEIVED NOTICE BY LETTER DATED MAY 22, 2009 (THE "DEFAULT NOTICE") THAT A
NUMBER OF DEFAULTS AND EVENTS OF DEFAULT UNDER THE CREDIT AGREEMENT HAVE
OCCURRED AND ARE CONTINUING AS OF THE DATE HEREOF.
THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY ACKNOWLEDGE THAT THE BORROWERS HAVE CONTESTED THE ASSERTIONS
MADE IN THE DEFAULT NOTICE.
ON JUNE 30, 2009, THE OUTSTANDING AMOUNT OF THE
CONSTRUCTION LOANS UNDER THE CREDIT AGREEMENT BECAME DUE AND PAYABLE BECAUSE THE
CONSTRUCTION LOANS MATURED ON SUCH DATE AND WERE NOT CONVERTED INTO TERM LOANS
IN ACCORDANCE WITH THE CREDIT AGREEMENT.
3.
SECTION 6.1(A) OF THE ACCOUNT AGREEMENT
PROVIDES THAT, ON AND AFTER THE DATE ON WHICH THE DEPOSITARY AGENT HAS RECEIVED
A NOTICE OF AN EVENT OF DEFAULT (WHICH NOTICE WAS PROVIDED PURSUANT TO THE
LIMITED CONSENT AND WAIVER AND AMENDMENT DATED AS OF MAY 28, 2009 BY AND AMONG
THE PARTIES HERETO), THE DEPOSITARY AGENT SHALL ACCEPT ALL NOTICES AND
INSTRUCTIONS REQUIRED TO BE GIVEN TO THE DEPOSITARY AGENT PURSUANT TO THE
ACCOUNT AGREEMENT ONLY FROM THE COLLATERAL AGENT (ACTING ON THE INSTRUCTIONS OF
THE ADMINISTRATIVE AGENT PURSUANT TO THE CREDIT AGREEMENT) AND NOT FROM ANY
OTHER PERSON, AND THE DEPOSITARY AGENT SHALL NOT WITHDRAW,
DISPOSE OF, TRANSFER, PAY OR OTHERWISE DISTRIBUTE ANY MONIES IN ANY OF THE
ACCOUNTS EXCEPT PURSUANT TO NOTICES AND INSTRUCTIONS FROM THE COLLATERAL AGENT
(ACTING ON THE INSTRUCTIONS OF THE ADMINISTRATIVE AGENT PURSUANT TO THE CREDIT
AGREEMENT).
4.
HOWEVER, THE BORROWERS ARE IN IMMEDIATE
NEED OF FUNDS FOR THE PURPOSES AND IN THE AMOUNTS SPECIFIED IN THE DAILY CASH