Exhibit 10.2
THIS NOTE (THE "NOTE") HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAW (THE "STATE ACTS"),
AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED
(WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT UPON OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND/OR STATE ACTS, THE AVAILABILITY OF
WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE ISSUER.
$806,250 Littleton, Colorado
December 31, 2007
2.5% Interest Promissory Note
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FOR VALUE RECEIVED, New Frontier Energy, LLC, a Colorado corporation (the
"Issuer"), promises to pay to the order of Natural Resource Group Gathering,
LLC, a Colorado limited liability company (the "Holder"), in accordance with,
and subject to, the provisions set forth herein, the principal amount of Eight
Hundred Six Thousand Two Hundred Fifty Dollars ($806,250.00) (the "Principal
Amount"), together with interest as set forth in Section 1. Subject to the terms
hereof, the Issuer shall repay the entire unpaid principal amount of the Note
and any accrued and unpaid interest thereon on or before December 31, 2008 (the
"Maturity Date").
1. Principal and Interest Payments. Interest shall accrue on the Principal
Amount outstanding from time to time at a simple rate per annum equal to Two and
50/100 percent (2.50%) (the "Applicable Rate"). The Principal Amount, together
with all accrued and unpaid interest, shall be paid quarterly in arrears,
commencing on March 31, 2008, and in accordance with the amortization schedule
attached hereto as Exhibit A.
2. Option to Defer Payment. Notwithstanding the above Section 1, the Issuer
may in its sole and absolute discretion, and without notice to the Holder,
determine to defer any quarterly payment due until the Maturity Date (Issuer's
"Option to Defer"). Should Issuer choose to exercise its Option to Defer, the
Principal Amount outstanding shall continue to accrue interest at the Applicable
Rate.
3. Optional Prepayment. Issuer may, at any time and from time to time, without
premium or penalty, prepay all or any portion of the Note (including principal
and any accrued but unpaid interest thereon); provided, however, that any
prepayment shall first be applied to any accrued but unpaid interest.
4. Events of Default. Each of the following shall constitute an Event of
Default hereunder :
(a) the Issuer's failure to make any payment as required by this Note, and
such failure continues for thirty (30) days after Holder notifies Issuer thereof
in writing; or
(b) the Issuer shall (i) commence a voluntary case under the Bankruptcy
Code of 1978, as amended, or other federal bankruptcy law (as now or hereafter
in effect); (ii) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition for adjustment of debts; (iii) consent to or fail to contest
in a timely manner any petition filed against it in an involuntary case under
such bankruptcy laws or other laws; or (iv) apply for or consent to, or fail to
contest in a timely manner, the appointment of, or the taking of possession by,
a receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign; or
(c) a case or other proceeding shall be commenced and not discharged,
dismissed or stayed within thirty (30) days, against the Company in any court of
competent jurisdiction seeking (i) relief under the Bankruptcy Code of 1978, as
amended or other federal bankruptcy law (as now or hereafter in effect) or under
any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts or (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like for the Company or all or
any substantial part of the assets, domestic or foreign, of the Company.
5. Remedies Upon Default. Whenever there is an Event of Default under this
Note the entire balance outstanding and all other obligations of Issuer to the
Holder hereunder (however acquired or evidenced) shall, at the option of the
Holder, and by written notice to Issuer, become immediately due and payable.
6. Binding Effect; No Assignment. This Note is being executed and delivered in
connection with, and is subject to, that certain Partnership Interest Purchase
Agreement between Issuer and Holder and dated December __, 2007. This Note may
not be assigned by the Issuer or Holder without the prior written consent of the
other party.
7. Place of Payment. All payments of principal and interest on the Note shal
be made by check and delivered to Holder at the address set forth in Section 8
or at such other place as Holder shall designate to Issuer in writing, or by
wire transfer of immediately available funds to an account designated by Holder
in writing.
8. Notices. All notices required or permitted hereunder shall be in writing,
addressed to the party to be notified a such party's address as set forth below
or as subsequently modified by ten (10) days advance written notice to the other
party hereto, and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified; (ii) when sent by confirmed facsimile or electronic
transmission if sent during normal business hours of the recipient on a business
day, or if not, then on the next business day; or (iii) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. The mailing address and
facsimile number of each of the parties are as follows:
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If to the Holder: Natural Resource Group Gathering, LLC
Attn: ▇▇▇▇ ▇▇▇▇▇▇
_____________________________________
_____________________________________
Facsimile No. ________________
If to Issuer: New Frontier Energy, Inc.
Attn: ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
9. Amendments and Waivers. Any term of this Note may be amended or waived only
with the written consent of the Issuer and the Holder. Any waiver by the Issuer
or the Holder of a breach of any provision of this Note shall not operate as or
be construed to be a waiver of any other breach of such provision or of any
breach of any other provision of this Note. The failure of the Issuer or the
Holder to insist upon strict adherence to any term of this Note on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Note.
10. Governing Law. This Note and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed
and interpreted in accordance with the laws of the State of Colorado, without
giving effect to principles of conflicts of law thereof.
(Signature Page Follows)
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IN WITNESS WHEREOF, Issuer has caused this Note to be executed under seal
by its duly authorized officer as of the day and year first written above.
"ISSUER"
New Frontier Energy, Inc.
By: /s ▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
"HOLDER"
Natural Resource Group Gathering,
LLC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
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EXHIBIT A
AMORITIZATION SCHEDULE
Quarterly Payment Period Amount Due Interest Principal Balance
Date
$ 806,250.00
3/31/2008 1 204,721.73 5,039.06 199,682.67 606,567.33
6/30/2008 2 204,721.73 3,791.05 200,930.68 405,636.66
9/30/2008 3 204,721.73 2,535.23 202,186.50 203,450.16
12/31/2008 4 204,721.73 1,271.56 203,450.17 0.00
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