Thursday, May 6, 1999
Trans Pacific Stores
000 Xxxx Xx., Xxxxx 000
Xxxxxxxx, XX 00000
Re: Letter Amendment
Gentlemen:
Reference is made to (i) the Secured Draw Down Promissory Note, dated
as of June 12, 1998 in the principal amount of $4 million ("Note") made by Covol
Technologies, Inc. ("Covol") to Trans Pacific Stores, Ltd. ("Trans Pacific"),
(ii) the Loan and Security Agreement, dated as of June 12, 1998 ("Security
Agreement") by and between Covol and Trans Pacific, (iii) the Common Stock
Purchase Warrants of Covol Technologies, Inc., certificate no. WA-1998-287,
dated as of October 12, 1998, for 100,000 shares ("Trans Pacific Warrants") made
by Covol to Trans Pacific, and (iv) the Common Stock Purchase Warrants of Covol
Technologies, Inc., certificate no. WA-001, dated as of August 19, 1997, for 85,
713 shares ("Xxxxxxx Xxx Warrants"), made by Covol to Xxxxxxx Xxx Ltd. Co.
The parties to the above referenced agreements and instruments hereby
amend the terms there of as follows:
Section 2 of the Note is amended to provide that $1 million of the
principal shall be due and payable on or before December 31, 1999 and $3 million
of the principal and any accrued but unpaid interest shall be due and payable on
April 30, 2000. The entire $4 million shall bear interest at 14 percent per
annum beginning June 13, 1999 and shall then be payable monthly in arrears
beginning June 30, 1999.
Section 3 of the Security Agreement is amended to provide that the
August 1996 Xxxxxx Promissory Note and the interest in future quarterly earned
royalties payable to Covol pursuant to section 3.4 of the License Agreement
between Appalachian Synfuel, LLC and Covol dated December 4, 1997 shall each be
held as collateral for the full amounts due under the Note until the Note, as
amended herein, is repaid in full.
The Trans Pacific Warrants and the Xxxxxxx Xxx Warrants are both
amended to provide that the Exercise Periods shall be extended for one year from
the original Termination Dates and that the Per Share Warrant Prices (exercise
prices) shall be the lower of the average closing share price of Covol common
stock for the five days immediately before May 6, 1999 or June 12, 1999.
2
This letter agreement may be executed in one or more counterparts, all
of which shall be considered one and the same letter agreement.
Very truly yours,
Covol Technologies, Inc.
/s/ Xxxxxx X. Xxxxxxx
-------------------------
Xxxxxx X. Xxxxxxx
Chief Financial Officer
Accepted and Agreed to as of the date first set forth above:
Trans Pacific Stores, Ltd.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
