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EXHIBIT 99.1
REVOLVING CREDIT AGREEMENT
BY AND BETWEEN
BIRCH BRANCH, INC.,
as Borrower
AND
MATHIS FAMILY PARTNERS, LTD., LAZZERI FAMILY TRUST and
TIMOTHY BRASEL AND ASSIGNS
as Lender
Dated as of January 23, 2007
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TABLE OF CONTENTS
ARTICLE 1 - CERTAIN
DEFINITIONS.........................................1
Section 1.1 Certain Definitions............................1
Section 1.2 Construction...................................2
ARTICLE 2 - LOANS, NOTES AND
PREPAYMENTS................................3
Section 2.1 Loans..........................................3
Section 2.2 Notes..........................................3
Section 2.3 Procedure for Borrowing........................3
Section 2.4 Repayment of Loans.............................3
Section 2.5 Optional Prepayments...........................4
Section 2.6 Indemnity......................................4
Section 2.7 Computations...................................4
Section 2.8 Repayment of the Loans.........................4
ARTICLE 3 - EVENTS OF
DEFAULT...........................................4
Section 3.1 Events of Default..............................4
Section 3.2 Remedies.......................................4
ARTICLE 4 -
MISCELLANEOUS...............................................5
Section 4.1 Amendments, etc................................5
Section 4.2 Notices, etc...................................5
Section 4.3 No Waiver; Remedies............................5
Section 4.4 Binding Effect.................................5
Section 4.5 Governing Law..................................5
Section 4.6 Usury Laws....................................5
Section 4.7 Section Headings...............................5
Section 4.8 Execution......................................5
EXHIBITS
Exhibit A - Form of Request for Borrowing
Exhibit B - Form of Revolving Loan Note
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT ("Agreement") is made as of
January 23,
2007 by and between Birch Branch, Inc., a Colorado corporation
("Borrower"), and
Mathis Family Partners, Ltd. ("Mathis"), Lazzeri Family Trust
("Lazzeri") and
Timothy Brasel and Assigns ("Brasel") (Mathis, Lazzeri and
Brasel collectively,
the "Lender").
EXPLANATORY STATEMENT
A. Earnest Mathis, the General Partner of the Mathis Family
Partners, Ltd.
and Robert Lazzeri, the Trustee of the Lazzeri Family Trust are
officers and
directors of the Borrower.
B. The Borrower has and requested, and the Lender has agreed to
make,
Loans, advances and other financial accommodations to the
Borrower on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing Explanatory
Statement
that is made a substantive part of this Agreement, and the
promises set forth
herein and for other good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as
follows:
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions. In addition to words and terms
defined
elsewhere in this Agreement, the following words and terms shall
have the
following meanings, respectively, unless the context clearly
requires otherwise:
"Agreement" shall mean this Revolving Credit Agreement, as the
same may be
amended, restated, supplemented or otherwise modified from time
to time
hereafter, including all Schedules and Exhibits hereto.
"Authorized Officer" shall mean either Earnest Mathis or Robert
Lazzeri.
"Borrower's Account" shall mean the Borrower's bank account as
may be
designated by the Borrower from time to time by written notice
to the Lender.
"Business Day" shall mean any day other than a Saturday or
Sunday or other
day upon which banks or the Lender are authorized or required to
close in the
State of Colorado.
"Dollar," "Dollars," "U.S. Dollars" and the symbol "$" shall
mean the
lawful currency of the United States of America.
"Event of Default" shall mean any of the Events of Default
described in
Section 3.1.
"Funding Date" shall mean the date on which a Loan is made
hereunder.
"Insolvency Event" shall mean, with respect to any Person, (i)
such Person
generally shall not pay its debts as such debts become due, or
shall admit in
writing its inability to pay its debts generally, or shall make
a general
assignment for the benefit of creditors; or any proceeding shall
be instituted
by or against such Person seeking to adjudicate it a bankrupt or
insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment,
protection, relief, or composition of it or its debts under any
Law related to
bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, or other
similar official for it or for any substantial part of its
property provided;
however, any proceeding instituted against such Person shall not
constitute an
Insolvency Event if such proceeding has been dismissed within
sixty (60) days of
the institution of such proceeding against such Person; or (ii)
such Person
shall take any action to authorize any of the actions set forth
in clause (i)
herein.
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"Interest Rate" shall have the meaning provided in Section
2.4(b).
"Law" shall mean any law (including common law), constitution,
statute,
treaty, regulation, rule, ordinance, opinion, release, ruling,
order,
injunction, writ, decree or award of any governmental
authority.
"Loan" shall have the meaning provided in Section 2.1.
"Loan Documents" shall mean this Agreement, the Revolving Loan
Note and any
other instruments, certificates or documents delivered or
contemplated to be
delivered hereunder or thereunder or in connection herewith or
therewith, as the
same may be supplemented or amended from time to time hereafter
in accordance
herewith or therewith, and "Loan Document" shall mean any of the
Loan Documents.
"Person" shall mean any individual, corporation, partnership,
limited
liability company, joint-stock company, trust, unincorporated
organization or
association, joint venture, government or political subdivision
or agency
thereof, or any other entity.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan or
any other amount under this Agreement, the Revolving Loan Note
or any other Loan
Document that is not paid when due to the Lender (whether at
stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise),
a rate per
annum during the period from and including the due date to but
excluding the
date on which such amount is paid in full equal to the lesser of
fifteen percent
(15%) or the maximum amount permitted by applicable Law.
"Request for Borrowing" has the meaning assigned to such term in
Section
2.3(a).
"Revolving Loan Note" means the promissory note of the Borrower,
payable to
the order of the Lender, in substantially the form of Exhibit B
hereto,
evidencing the aggregate indebtedness of the Borrower to the
Lender resulting
from Loans made by the Lender.
"Term of this Agreement" means from the date hereof the
Revolving Loan Note
is immediately due and payable on demand by the Lender and, in
any event, for a
period of no longer than five (5) years.
"Total Loan Amount" shall mean up to $250,000, as such amount
may be
reduced from time to time in accordance with this Agreement.
Section 1.2 Construction. Unless the context of this Agreement
otherwise
clearly requires, references to the plural shall include the
singular,
references to the singular shall include the plural, references
to the part
shall include the whole and references to any masculine,
feminine or neuter
pronoun shall include all other genders. References in this
Agreement to
"determination" of or by the Lender shall be deemed to include
good faith
estimates by the Lender (in the case of quantitative
determinations) and good
faith beliefs by the Lender (in the case of qualitative
determinations). The
words "hereof," "herein," "hereunder" and similar terms in this
Agreement refer
to this Agreement as a whole and not to any particular provision
of this
Agreement. Any references herein to Articles, Sections, Exhibits
or Schedules
are references to Articles, Sections, Exhibits and Schedules of
or to this
Agreement unless otherwise expressly specified. The Section and
other headings
contained in this Agreement and the Table of Contents preceding
this Agreement
are for reference purposes only and shall not control or affect
the construction
of this Agreement or the interpretation thereof in any
respect.
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ARTICLE 2
LOANS, NOTES AND PREPAYMENTS
Section 2.1 Loans.
(a) The Lender agrees, on the terms and conditions of this
Agreement, to
make Loans (individually, a "Loan"; collectively, the "Loans")
to the Borrower
in Dollars, on any Business Day during the Term of this
Agreement in an
aggregate principal amount at any one time outstanding up to but
not exceeding
the Total Loan Amount. This Agreement shall not obligate the
Lender to make any
specific Loans to the Borrower, but if Loans are made up to the
Total Loan
Amount, such Loans will be pursuant to the terms and conditions
of this
Agreement and the Revolving Loan Note. Subject to the terms and
conditions of
this Agreement, during such period the Borrower may borrow,
repay and re-borrow
hereunder. All previous loans made by the Lender to the Borrower
will be subject
to the terms and conditions of this Agreement and shall be
included in the terms
"Loan" or "Loans" in this Agreement.
(b) In no event shall a Loan be made when any Event of Default
has occurred
and is continuing or would exist after the making of such Loan
on such Funding
Date.
Section 2.2 Notes.
(a) The Loans made by the Lender shall be collectively evidenced
by the
Revolving Loan Note, dated the date hereof, payable to the
Lender in a principal
amount equal to the amount of the Total Loan Amount then
outstanding plus
accrued interest.
(b) The date and amount of each Loan made by the Lender to the
Borrower,
and each payment made on account of the principal thereof, shall
be recorded by
the Lender on its books and, prior to any transfer of the
Revolving Loan Note,
endorsed by the Lender on the schedule attached to the Revolving
Loan Note or
any continuation thereof; provided that the failure of the
Lender to make any
such recordation or endorsement shall not affect the obligations
of the Borrower
to make a payment when due of any amount owing hereunder or
under the Revolving
Loan Note in respect of the Loans.
Section 2.3 Procedure for Borrowing.
(a) The Borrower may request a borrowing hereunder, on any
Business Day
during the Term of this Agreement by delivering to the Lender a
written Request
for Borrowing, substantially in the form of Exhibit A hereto,
signed by an
Authorized Officer.
(b) If the Lender agrees to fund the Request for Borrowing, the
amount of
the requested borrowing shall be advanced in immediately
available funds,
without deduction, set-off or counterclaim, to the Borrower's
Account, not later
than ten days after receipt of the Request for Borrowing.
Section 2.4 Repayment of Loans.
(a) The total outstanding principal balance of each outstanding
Loan shall
be immediately due and payable on demand by the Lender.
(b) Each Loan shall bear interest at a rate per annum equal to
seven
percent (7%).
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(c) Notwithstanding the foregoing, the Borrower hereby promises
to
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