Message-ID: <16786801.1075842254570.JavaMail.evans@thyme> Date: Thu, 10 Feb 2000 05:34:00 -0800 (PST) From: dan.bump@enron.com To: dan.hyvl@enron.com Subject: FW: Mortgage Agreement Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Dan J Bump X-To: Dan J Hyvl X-cc: X-bcc: X-Folder: \Dan_Hyvl_Dec2000_June2001\Notes Folders\Gas\Denver X-Origin: HYVL-D X-FileName: dhyvl.nsf FYI ---------------------- Forwarded by Dan J Bump/DEN/ECT on 02/10/2000 02:33 PM --------------------------- Enron Capital & Trade Resources Corp. From: Doug Garrett 02/10/2000 12:13 PM To: "'qeoh@aol.com'" , "'qecinc@aol.com'" cc: "'roobannon@phillipsmcfall.com'" , Dan J Bump/DEN/ECT@Enron Subject: FW: Mortgage Agreement FYI, The following was conveyed to Dan Bump via a telephone conversation: In order to operate in the states of WY and MT, Enernet of Wyoming, LLC (EOW) executed 3 operating bonds (1) $10,000 bond to WY State Office of Lands and Investments (2) $25,000 statewide operating bond in favor of the MT BLM and (3) a $50,000 statewide operating bond in favor of the MT Board of Oil and Gas Conservation. BancFirst guaranteed the $25,000 MT BLM bond, $25,000 of the $50,000 MT State bond and the $10,000 WY State Lands bond. BancFirst required EOW to execute two $25,000 promissory notes to secure the banks guarantees. Enernet, Inc., (50% owner/member of EOW)and its owners guaranteed the promissory notes for the bank. EOW can immediately move to have one if not both of these promissory notes cancelled in order not to impede the mortgage transaction with Enron. Alternatively, in the very near future, EOW will transfer all of its operated properties in MT to the new operating entity currently being formed by Quantum and US Energy. When the new operating entity is in place, EOW will immediatedly transfer operations on all existing properties to the new entity. Once operations are transfered EOW will request cancellation of all MT bonding, which, will be appproved by the BLM and the MT State Board of Oil and Gas upon the successful transfer of operations from EOW to the new entity. With the MT bonds cancelled, BancFirst will release the mortgage in question. EOW owns 2.5% of the Bonepile lease. This should not be an obstacle in this transaction. If Enron makes it one, it can be taken out of the equation. The Enron record check in progress should reveal that 97.5% of the Bonepile lease should be free and clear of liens and encumbrances but for the JOA recording supplements filed routinely by EOW and other operators. I will await the next communication from Dan Bump or Dan Hyvl. -----Original Message----- From: dbump@ect.enron.com [mailto:dbump@ect.enron.com] Sent: Wednesday, February 09, 2000 4:07 PM To: dkg@enernetok.com; Roobannon@phillipsmcfall.com Subject: Mortgage Agreement Gentlemen: Latest version of subject document attached for your review. I've been told to advise you that Enron would like to do further due diligence (e.g. credit analysis, etc.) to get comfortable with Enernet's existing mortgage(s) to have a good understanding of the situation. Same me need to be done for Quantum. In other words, the agreement below could be amended based on further analysis. I'll let you know if anything materializes other than a phone call from Enron credit to Enernet for information. Dan (See attached file: Quantum Mortgage Agreement redline 02-09-2000.doc) - Quantum Mortgage Agreement redline 02-09-2000.doc