Exhibit 10.13


 


	
  Cano Petroleum, Inc.

  The Oil & Gas Commerce Building

  309 West Seventh Street, Suite 1600

  Fort Worth, TX 76102

  	
   

  	
   

  	
  

  
	
  Phone (US) 817-698-0900

  	
   

  	
   

  	
  producing oil & gas

  
	
  Toll Free 1-877-698-0900

  	
   

  	
   

  	
  in the USA

  
	
  Fax 817-698-0796

  	
   

  	
   

  	
  for the USA

  



 


February 14, 2006


 


Union Bank of California, N.A.

Lincoln Plaza

500 N. Akard Street, Suite 4200

Dallas, Texas 75201

Attention: Ali Ahmed

Facsimile: (214) 922-4209


 


Dear Mr. Ahmed:


 


Reference is made to that certain Credit Agreement (the “Credit Agreement”) dated as of
November 29, 2005, by and among Cano Petroleum, Inc. (the “Borrower”), certain leaders named therein (the “Lenders”), and Union Bank of
California, N. A. (“Union Bank”),
as Administrative Agent and leasing Lender. Capitalized terms used herein
shall, unless otherwise indicated, have the respective meanings set forth in
the Credit Agreement.


 


Borrower hereby notifies Union Bank, as Administrative Agent and
Lender, that Borrower may not be able to comply with the covenant set forth in Section 5.01 of the Credit
Agreement, which requires that Borrower comply in all material respects with
all material Legal Requirements. In connection with Borrower’s acquisition of
W.O. Energy of Nevada, Inc. (“W.O.”),
Borrower is required to file the financial statements of W.O. and the pro forma
financial information required by Item 9.01(a-b) of Form 8-K by amendment (the “Amendment”) to the 8-K
previously filed with the Securities and Exchange Commission on December 5,
2005 (the “8-K”).
The required financial statements and pro forma financial information involve
all of W.O.’s prior activities, including non-oil & gas activities that
were specifically excluded from Borrower’s acquisition of W.O. (e.g. an
airplane company and a hotel company). Additionally, Borrower and Borrower’s
independent auditor have received no cooperation or support from W.O.’s external
accountant in this matter. Such Amendment is required to be filed within 71
days after the date the initial 8-K was required to be filed (December 5,
2005), but Borrower will be unable to file the Amendment in a timely manner.
Borrower intends to file the Amendment as soon as possible, but no later than
10 calendar days from the date hereof. As a result, Borrower is requesting that
Union Bank, as Majority Lender, waive, for a period not to exceed ten (10)
calendar days from the date hereof, the requirements of Section
5.01 of the Credit Agreement, insofar and only insofar as such
requirements pertain to the timely filing of the Amendment (the “Covenant”). By execution of
this letter in the space provided below, Union Bank, as Major Lender, hereby
waives the Covenant according to the terms set forth herein.


 

















 


	
  Warmest regards,

  
	
   

  
	
  /s/ Mike Ricketts

  	
   

  
	
  Mike Ricketts

  
	
  Chief Financial Officer

  
	
  Telephone Number: (817) 412-1349

  
	
  Fax Number: (817) 334-0222

  



 


 


	
   

  	
  Accepted and Agreed to:

  
	
   

  	
   

  
	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ali
  Ahmed

  	
   

  
	
   

  	
  Name:

  	
  Ali Ahmed

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
						



 


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