Exhibit 10.3
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement (the "Agreement") is made and entered
into this 16th day of April, 1997, by and between K.L.S. Enviro Resources, Inc.,
a Nevada corporation ("KLS"), and its wholly-owned subsidiaries, Dateline
Drilling, Inc., a Montana corporation, K.L.S. Co., Inc., a Nevada corporation,
K.L.S. International, Inc., a Nevada corporation, Dateline Internacional, S.A.
de C.V., an entity incorporated under the laws of Mexico, Beloro, S.A. de C.V.,
an entity incorporated under the laws of Mexico, and K.L.S. Environmental,
Inc., a Nevada corporation (KLS and each of its subsidiaries listed above are
sometimes collectively referred to as "Borrower") and SMD, L.L.C., a Utah
limited liability company (hereinafter "Lender").
RECITALS:
A.On September 30, 1996 Borrower executed and delivered to Lender
that certain Promissory Note (the "Note") in the principal amount of One
Million Six Hundred Seventy-Three Thousand Seven Hundred Thirty Dollars
($1,673,730.00). The obligations of the Borrower reflected by the Note are
hereinafter sometimes referred to as the "Loan".
B.Thereafter, Borrower paid down the principal balance of the Loan
to approximately $185,000. In March 1997, Borrower requested that Lender
advance an additional $1,200,000 to it pursuant to the terms of the Loan.
C.Lender advanced sums totaling $1,200,000 to Borrower in three (3)
separate tranches on March 25, 1997, April 4, 1997 and April 18, 1997
(collectively, the "Advance") as follows:
Date Amount of Advance
----- -------------------
March 25, 1997 $ 936,896.00
April 1, 1997 63,104.00
April 18, 1997 200,000.00
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TOTAL $ 1,200,000.00
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the adequacy and receipt of
which are hereby acknowledged, the parties hereto agree as follows:
1. Incorporation of Recitals. All of the terms and representations
set forth in the above Recitals are incorporated herein by this reference.
2. Advance Governed by the Note. Borrower and Lender acknowledge and
agree that the Advance was made pursuant to the terms of the Note, and that the
repayment of the Advance shall be governed by the terms and conditions of the
Note.
3. Representations and Warranties. Borrower hereby represents and
warrants to Lender that, upon execution of this Agreement, Borrower shall not
be in default in any term, condition, or covenant contained in the Note, this
Agreement, or any other agreement made or given in connection therewith or the
Loan, and is not aware of the occurrence of any event or the existence of any
condition which, with the giving of notice or passage of time or both, would
constitute a default thereunder.
4. Remaining Terms Unchanged. Except as specifically modified by this
Agreement, all of the remaining terms and conditions set forth in the Note and
any other agreement or any other document made and given in connection
therewith, shall remain unchanged and in full force and effect. Borrower
specifically acknowledges and agrees that any security interest previously
conveyed to Lender shall continue to secure Borrower's obligations as modified
by this Agreement. This Agreement shall be secured by that Security Agreement
dated as of September 30, 1996 from Borrower to Lender, Stock Pledge Agreement
dated as of September 30, 1996 between KLS and Lender, UCC-1 Financing
Statements filed with the Montana Secretary of State at File Nos. 498721,
498722, 498723, 498724, and 498725 and filed with the Texas Secretary of State
at File Nos. 254253, 254254, and 254255.
5. Entire Agreement. This Agreement represents the entire
understanding and Agreement of Borrower and Lender with respect to the Loan
modification discussed herein, and supersedes any previous discussions,
negotiations or agreements with respect thereto. Except as specifically set
forth herein, the Loan and documents executed in connection therewith are
unmodified and remain in full force and effect.
6. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Utah, without giving effect to its
conflicts of laws principles.
EXECUTED on the day and year first above written.
BORROWER: K.L.S. ENVIRO RESOURCES, INC., a Nevada
corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
DATELINE DRILLING, INC., a Montana corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx, Vice President
K.L.S. CO., INC., a Nevada corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, President
K.L.S. INTERNATIONAL, INC., a Nevada corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, President
DATELINE INTERNACIONAL, S.A. de C.V., a Mexican
corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, President
BELORO, S.A. de C.V., a Mexican corporation,
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, President
K.L.S. ENVIRONMENTAL, INC., a Nevada corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, President
LENDER: SMD, L.L.C., a Utah limited liability company
By:/s/ Xxxxxx X. Xxxxxxx
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Its: Manager
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