GENERAL40514 - Laserfiche WebLink

Home Browse Search

...~ • JAMES S. MUNN LAWYER 1201 THIRD AVENUE. SUITE 1900 SEATTLE. WASHINGTON 98101 (2061 6 2 33 3 1 3 July 12, 1990 Mr. Rodney D. Knutson Knutson, Bright well s Reeves, P.C. 1200 Hudson's Bay Centre 1600 Stout Street Denver, Colorado 80202-3133 • iii iiiiiiiiiiiiiiii Re: Gold Hill/Mi Vida/COM, Inc./Cosmos, Inc. Dear Rodney: This is a further communication with respect to the status and relationship of Mr. and Mrs. Fraser and the corporation, COM, Inc., to Gold Hill Ventures and the limited partnership. We have previously expressed to you Fraser willingness to sell the mill (COM, Inc.) for $1,500,000. The purchase price may be paid as $500,000 cash on closing with the $1,000,000 balance paid out of mill operations over a three-year period. If the mill is to be purchased as part of a third party par- ticipation, the balance of the purchase price should bear the same interest consideration as any other deferred balance associated with the purchase and investment. Payment out of mill operations should be a function of the gross. By gross it is meant gross return on product. We seem to have had some difficulty defining this in the past. Perhaps it would be useful to run projections and determine hnl~, trio _°hou ld be paid in _rder th3*_ the ob li;.s~_o_^. can ~e retired~on a reasonably consistent basis over a 36-month period. This arrangement rests upon the agreed determination of the Fraser interest as 21$ corresponding to an equity contribu- tion of $2.1 million. The effect of a mill sale at $1,500,000 reduces the Fraser interest to a residual interest of 6~ in the Limited Partnership. Frasers are prepared to enter into a Gold Hill Ventures limited partnership agreement, substantially in the form pre- viously presented, which will reflect 6% or six $100,000 units of participation. Any such agreement should appropri- a*_ely recognize the Fraser interest in the mill and should