Exhibit A
CONSOLIDATED ENERGY, INC.
September 23, 2005
CONSENT AND WAIVER
Gentlemen:
Reference is made to that certain Securities Purchase Agreement dated as of
February 22, 2005 among Consolidated Energy, Inc., a Wyoming corporation (the
"Company") and the Purchasers (the "Purchasers") named therein, as amended
through the date hereof (the "Purchase Agreement"), the 6% Senior Secured
Convertible Notes Due 2008 of Consolidated Energy, Inc. in favor of the holders
thereof (the "Senior Notes"), and the other Transaction Documents. Capitalized
terms, unless otherwise herein defined, shall have the meanings assigned to them
in the Purchase Agreement.
Cordillera Fund L.P. (the "Bridge Lender") desires to extend credit to the
Company pursuant to a Promissory Note dated September 23, 2005 (the "Bridge
Note"). In order to induce the Bridge Lender to extend credit to the Company,
the Bridge Lender requires the Purchasers to consent to the Company executing
the Bridge Note, incurring the indebtedness under the Bridge Note, and entering
into and consummating the transactions and issuance of securities referenced in
the Bridge Note (collectively, the "Bridge Loan Transactions").
The undersigned hereby consent to the Company entering into the Bridge Loan
Transactions, and hereby waive, on the date hereof and until resolution of the
Bridge Loan Transactions, the application of any of the provisions of the
Transaction Documents that would be operative by virtue of the Bridge Loan
Transactions, including, without limitation, those set forth in Section 3.12,
Section 3.15(a) and Section 3.15(b) of the Purchase Agreement, Section 3(c)(ii)
of each Senior Note, and Section 6 of each Warrant. The undersigned understand
that the Bridge Lender is relying on this letter in order to enter into and
consummate the Bridge Loan Transactions and would not do so but for the consent
and waivers granted hereunder.
Any failure by the Company or the Bridge Lender to comply with the terms of
the Subordination Agreement dated September 23, 2005, shall be deemed to be an
Event of Default under the Senior Notes (as defined in the Senior Notes) and
shall entitle the holders of the Senior Notes to all remedies and actions
granted by the Purchase Agreement and Senior Notes.
It is agreed that no shares included in any registration statement filed in
accordance with the Purchase Agreement for the benefit of the Purchasers, shall
be allocated to satisfy any rights or claims asserted in connection with the
Bridge Note, except those shares added to any registration statement for the
purpose of satisfying the Bridge Note.
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Each of the holders of the Senior Notes further acknowledges and agrees
that this letter agreement shall serve as an endorsement to each of the Senior
Notes. This letter agreement shall not constitute a waiver of any other
provision of the Transaction Documents nor be construed as an agreement by the
Purchasers to waive any provisions of the Transaction Documents for any other
transaction or for any other purpose. To the extent this letter agreement
constitutes an amendment of the Transaction Documents, the parties by their
signature hereon consent and agree to such amendment of the Transaction
Documents. This letter agreement may be executed in a number of counterparts,
all of which taken together shall constitute one and the same instrument. This
letter agreement shall be governed by the laws of the State of Texas without
regard to conflict of laws principles.
Please indicate your approval of the terms and provisions hereof by
executing this letter agreement in the space provided below.
Very truly yours,
CONSOLIDATED ENERGY, INC.
By:_________________________________
Name: David Guthrie
Title: President
Agreed and accepted by the following persons that have executed the attached
signature pages:
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.
CONSOLIDATED ENERGY, INC.
By:________________________________
Name: David Guthrie
Title:President
[Signatures of Purchasers to follow on next pages.]
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PURCHASERS:
GRYPHON MASTER FUND, L.P.
By: Gryphon Partners, L.P., its General Partner
By: Gryphon Management Partners, L.P., its General Partner
By: Gryphon Advisors, L.L.C., its General Partner
By:
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E.B. Lyon, IV, Authorized Agent
GSSF MASTER FUND, LP
By: Gryphon Special Situations Fund, LP, its General Partner
By: GSSF Management Partners, LP, its General Partner
By: GSSF, LLC, its General Partner
By:
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E.B. Lyon, IV, Authorized Agent
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LONESTAR PARTNERS, L.P.
By: Lonestar Capital Management, LLC, its General Partner
By:
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________________, Manager
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WS OPPORTUNITY INTERNATIONAL FUND, LTD.
By: WS Ventures Management, L.P., as agent and attorney-in-fact
By: WSV Management, LLC, its General Partner
By:
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Reid S. Walker, Member
WS OPPORTUNITY FUND (QP), L.P.
By: WS Ventures Management, L.P., its General Partner
By: WSV Management, LLC, its General Partner
By:
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Reid S. Walker, Member
WS OPPORTUNITY FUND, L.P.
By: WS Ventures Management, L.P., its General Partner
By: WSV Management, LLC, its General Partner
By:
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Reid S. Walker, Member
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RENAISSANCE US GROWTH INVESTMENT TRUST PLC
By:
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Russell Cleveland, Director
BFS US SPECIAL OPPORTUNITIES TRUST PLC
By:
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Russell Cleveland, Director
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ENABLE GROWTH PARTNERS, L.P.
By: ___________________________, its General Partner
By:
---------------------------------
Brendan O'Neil, Principal
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ENABLE OPPORTUNITY PARTNERS, L.P.
By: ___________________________, its General Partner
By:
-----------------------------------
Brendan O'Neil, Principal
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GAMMA OPPORTUNITY CAPITAL PARTNERS, L.P.
By: ___________________________, its General Partner
By:
---------------------------------------
Jonathan P. Knight, President/Director
BUSHIDO CAPITAL MASTER FUND, L.P.
By: Bushido Capital Partners, Ltd.,
its General Partner
By:
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Christopher Rossman, Managing Director
CORDILLERA FUND, L.P.
By: ACCF GenPar, L.P, its General Partner
By: Andrew Carter Capital, Inc., its General Partner
By:
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James P. Andrew, Co-CEO of Andrew Carter
Capital, Inc.
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NEWGRANGE PARTNERS, L.P.
By: ___________________________, its General Partner
By:
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Michael Scholten, Managing Partner