Exhibit 10.12
November 13, 2003
SUPPLEMENTAL
LETTER LOAN AGREEMENT
The ▇▇▇▇▇ Company
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
This Supplemental Letter Loan Agreement supplements and supersedes the previous
Supplemental Letter Loan Agreements between the parties hereto dated November 7,
2002 and June 6, 2003.
This Supplemental Letter Loan Agreement sets forth the terms and conditions
under which we have agreed to supplement your existing $3,000,000 long-term line
of credit with a short-term revolving loan to you in the principal amount of
$375,000.00 (the "Loan").
1. LENDER: The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇ ▇▇▇▇▇
1988 Charitable Unitrust (the "Unitrust").
2. BORROWER: The ▇▇▇▇▇ Company.
3. AMOUNT: Such amounts as the Borrower may request from time to
time up to $375,000.00. The Loan shall be evidenced
by a promissory note in the amount of $375,000.00 dated
as of today (the "Note"). The Borrower shall be permitted
to obtain advances, make prepayments, and obtain
additional advances, up to the amount of the Note.
4. INTEREST RATE: A fixed rate of 10.00%.
5. REPAYMENT: The outstanding principal balance (the "Indebtedness")
plus unpaid accrued interest shall be due and payable on
April 30, 2004. The parties agree that any payments made
by Borrower to Lender shall be applied first to this Loan.
6. COLLATERAL: The Lender, together with certain Note Holders, have
previously filed a Deed of Trust, Assignment of Production,
and Financing Statement of record (a "Lien") on its working
and overriding royalty interests in the McElmo Dome Unit in
Montezuma and ▇▇▇▇▇▇▇ Counties of Colorado ("Interests").
The Borrower will not sell, transfer, convey or otherwise
dispose of any of the Interests, whether pursuant to a
single transaction or a series of transactions.
7. COVENANT: Until the Indebtedness has been paid in full, the
Borrower will not sell, transfer, convey or otherwise
dispose of, all or a substantial portion of its assets now
owned or hereafter acquired, whether pursuant to a single
transaction or a series of transactions, and the
Borrower will not merge or consolidate with any person
or entity or permit any such merger or consolidation
with the Borrower. This paragraph specifically excludes
asset sales incurred in the normal course of business.
8. EVENTS OF
DEFAULT: If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
A. Failure of the Borrower to pay when due any
amounts, including principal or interest on the Note
(whether at the stated maturity, upon acceleration
or otherwise).
B. Any Event of Default as specified in the Note
C. Any default or breach in the performance of any
covenant, obligation, representation, warranty or
provision contained in this Letter Loan Agreement or
in the Note or in any other note or obligation of
Borrower to the Unitrust.
D. The Borrower shall: (i) apply for or consent to the
appointment of a custodian, receiver, trustee or
liquidator of the Borrower or any of its properties,
(ii) admit in writing the inability to pay, or
generally fail to pay, its debts when they come due,
(iii) make a general assignment for the benefit of
creditors, (iv) commence any proceeding relating to
the bankruptcy, reorganization, liquidation,
receivership, conservatorship, insolvency, readjustment
of debt, dissolution or liquidation of the Borrower,
or if corporate action should be taken by the Borrower
for the purpose of effecting any of the foregoing,
(v) suffer any such appointment or commencement of a
proceeding as described in clause (i) or (iv) of this
paragraph, which appointment or proceeding is not
terminated or discharged within 60 days, or (vi)
become insolvent.
THEN upon the occurrence of any Event of Default described in the foregoing
paragraphs the unpaid principal amount of and accrued interest on the Loan shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrower.
If the foregoing terms and conditions are acceptable to you, please acknowledge
your agreement by signing below and returning one copy of this Letter Loan
Agreement to us.
Sincerely,
LENDER:
THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ AND ▇▇ ▇▇▇▇▇
1988 CHARITABLE UNITRUST
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee ▇▇ ▇▇▇▇▇, Trustee
Accepted effective this 13th day of November, 2003.
BORROWER:
THE ▇▇▇▇▇ COMPANY
▇▇▇▇ ▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇, ▇▇., President
