ex_10-1.htm


    
      
        

      

      EXHIBIT 10.1

       

      AMENDMENT OF CREDIT
AGREEMENT

      


      THIS
AMENDMENT OF CREDIT AGREEMENT (this "Amendment"), dated as of December 31, 2008,
is by and between BASIC EARTH SCIENCE SYSTEMS, INC. ("BESSI"), and AMERICAN
NATIONAL BANK, a national banking association ("ANB"), f/k/a THE BANK OF CHERRY
CREEK, N.A. ("BOCC").

      


      RECITALS

      


      A.  BESSI
and BOCC entered into a letter agreement dated March 4, 2002, as previously
amended (as so amended, the "Credit Agreement"), setting forth the terms upon
which BOCC would make advances to BESSI and by which such advances would be
governed and repaid.  Capitalized terms used herein but not defined
herein shall have the same meanings as set forth in the Credit
Agreement.

      


      B.  ANB
is the successor in interest to the rights and obligations of BOCC under the
Credit Agreement and all related documents.

      


      C.  BESSI
and ANB desire that this Amendment be executed and delivered in order to amend
certain terms and provisions of the Credit Agreement.

      


      AMENDMENT

      


      NOW,
THEREFORE, in consideration of $10.00 and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

      


      
        	
                1.  

              	
                Credit
      Agreement. The Credit Agreement shall be, and hereby is, amended as
      follows as of the date hereof:

              


      

      


      
        	
                a.  

              	
                The
      following shall be substituted for the section entitled “Maturity Date” on
      page 2 of the Credit Agreement:

              


      

      


      
        	
                 
      

              	
                Maturity
      Date:

              	
                “December
      31, 2010, on which date the Borrower agrees to repay the remaining balance
      of the Loan in its entirety, including all outstanding principal interest,
      fees, expenses, and other amounts due in connection
      therewith”.

              


      

      


      
        	
                b.  

              	
                The
      following shall be substituted for the section entitled “Revolving Period”
      on page 2 of the Credit Agreement:

              


      

      


      
        	
                 
      

              	
                Revolving
      Period:

              	
                “From
      the date of this agreement through December 31, 2010.  During
      the Revolving Period Borrower may borrow, repay, and re-borrow
      funds.  At no time, however, may the aggregate outstanding
      principal balance of all Advances exceed the Commitment
      Amount”.

              


      

      


      
        	
                c.  

              	
                The
      following shall be substituted for the section entitled “Interest Rate” on
      page 2 of the Credit Agreement:

              


      

      


      
        	
                 
      

              	
                Interest
      Rate:

              	
                “Interest
      on the outstanding principal balance of the Line of Credit shall accrue at
      an annual rate equal to the greater of (a) the fluctuating Prime Rate (as
      defined in the Note) plus 1⁄4%, or (b) 6.5% per annum. After the occurrence
      of an Event of Default, interest on the Line of Credit shall accrue at a
      rate equal to the Prime Rate at the time of default plus five percentage
      points per annum. Borrower shall pay interest monthly on the 1st
      day of each calendar month and on the Maturity
  Date”.

              


      


      
        
           


        

        
          1

          
            

          

        

        
           


        

      

       

      
        	
                d.  

              	
                The
      following new section entitled “Accounts” shall be added to the end of
      page 2 of the Credit Agreement:

              


      

      


      
        	
                 
      

              	
                Accounts:

              	
                “Borrower
      will continue to maintain their primary operating accounts and payroll
      accounts with ANB during the term of this commitment and prior to payment
      in full of this Loan”.

              


      

      


      
        	
                2.  

              	
                The Amended
      Note.  The Amended Note shall be amended to reflect the
      interest rate floor of 6.5% per annum, such amendment to be affected by an
      Allonge (the “Allonge”), between Borrower and ANB, to be attached to the
      Amended Note and to be substantially in the form of Exhibit A attached
      hereto and made a part hereof.

              


      

      


      
        	
                3.  

              	
                Loan
      Documents.  All references in any document to the Credit
      Agreement shall be deemed to refer to the Credit Agreement, as amended
      pursuant to this Amendment.

              


      

      


      
        	
                4.  

              	
                Conditions
      Precedent.  The obligations of the parties under this
      Amendment are subject, at the option of ANB, to the prior satisfaction of
      the condition that BESSI shall have delivered to ANB the following (all
      documents to be satisfactory in form and substance to ANB and, if
      appropriate, duly executed and/or acknowledged on behalf of the parties
      other than ANB):

              


      

      


      
        	
                a.  

              	
                This
      Amendment.

              


      

      
        	
                b.  

              	
                The
      Allonge

              


      

      


      
        	
                5.  

              	
                Certification by
      BESSI. BESSI hereby certifies to ANB that as of the date of this
      Amendment: (a) all of BESSI’s representations and warranties contained in
      the Credit Agreement are true, accurate and complete in all material
      respects, (b) BESSI has performed and complied with all agreements and
      conditions required to be performed or complied with by it under the
      Credit Agreement and/or any Loan Document on or prior to this date, and
      (c) neither any Event of Default nor any other event or condition which,
      with the giving of notice, the lapse of time, or both, would constitute an
      Event of Default has occurred under the Credit
  Agreement.

              


      

      


      
        	
                6.  

              	
                Continuation of the
      Credit Agreement. Except as specified in this Amendment, the
      provisions of the Credit Agreement shall remain in full force and effect,
      and if there is a conflict between the terms of this Amendment and those
      of the Credit Agreement or any other document executed and delivered in
      connection therewith, the terms of this Amendment shall
      control.

              


      

      


      
        	
                7.  

              	
                Miscellaneous.
      This Amendment shall be governed by and construed under the laws of the
      State of Colorado and shall be binding upon and inure to the benefit of
      the parties hereto and their successors and assigns.  This
      Amendment may be executed in any number of counterparts, each of which
      shall be an original, but all of which together shall constitute one
      instrument.

              


      

      


      EXECUTED
as of December 31, 2008.

       

       

      BASIC
EARTH SCIENCE SYSTEMS, INC.

       

       

      By:  /s/ Ray
Singleton   

            Ray
Singleton

            President

       

       

      
              AMERICAN NATIONAL BANK
f/k/a

      

        THE
BANK OF CHERRY CREEK, N.A.

       

       

      
        By:  /s/
Kevin Donaldson   

              Kevin
Donaldson

              Vice
President

      


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                ALLONGE

              


      

       

      


      Reference
is made to an Amended Promissory Note dated March 4, 2002 (the "Note"), in the
face amount of $20,000,000, made by BASIC EARTH SCIENCE SYSTEMS, INC.
(“Borrower"), payable to the order of AMERICAN NATIONAL BANK
(“ANB").

      


      The Note
is hereby modified as follows, effective as of the date hereof:

      


      
        	
                1.  

              	
                The
      following shall be substituted for the first sentence of the fifth
      paragraph on page 1 of the Note:

              


      

      


      “Except
as otherwise provided below with respect to amounts not paid when due, interest
on the Loan shall accrue at an annual rate equal to the greater of (a) the Prime
Rate (as defined below) plus 1⁄4%, or (b) 6.5% per annum”.

      


      
        	
                2.  

              	
                In
      line 2 of the forth paragraph on page 1 of the Note, “December 31, 2008”
      shall be changed to “December 31,
2010”.

              


      

      


      EXECUTED
as of December 31, 2008.

      


      


      BASIC
EARTH SCIENCE SYSTEMS, INC.

      


      


      By: /s/ Ray
Singleton    


           
Ray Singleton

          
 President

      


      


      AMERICAN
NATIONAL BANK

      


      


      By: /s/
Kevin Donaldson  

           
Kevin Donaldson 

            Vice
President