April 1, 2005
RESTATED AND AMENDED
LETTER LOAN AGREEMENT
The Xxxxx Company
0000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Gentlemen:
This Restated and Amended Letter Loan Agreement supersedes and replaces the
previous Restated and Amended Letter Loan Agreement between the parties hereto
dated March 26, 2004, as amended by the parties on June 25, 2004.
This Restated and Amended Letter Loan Agreement sets forth the terms and
conditions under which we have agreed to continue $2,782,900.59 of the loan
previously made to you in the principal amount of $3,000,000.00 (the "Loan"),
which is no longer a revolving loan. Accordingly, as payments are made on the
Loan, additional advances will no longer be permitted.
1. LENDER: The Xxxxxxx X. Xxxxx and Xx Xxxxx
1988 Charitable Unitrust (the "Unitrust").
2. BORROWER: The Xxxxx Company.
3. AMOUNT: $2,782,900.59. The Loan shall be evidenced by a
promissory note in the amount of $2,782,900.59 dated
February 14, 2005* (the "Note"). The Borrower shall
be permitted to make prepayments without
penalty up to the amount of the Note.
_______________
*The Note has been dated February 14, 2005 because it was on that date
that all accrued interest on the former note was paid and a principal repayment
was made which reduced the principal balance under the Loan Agreement from
$2,785,000.00 down to $2,782,900.59.
4. INTEREST
RATE: A fixed rate of 10.00%.
5. REPAYMENT: The outstanding principal balance (the "Indebtedness")
plus unpaid accrued interest shall be due and
payable on April 1. 2007.
6. COLLATERAL: The Lender, together with certain Note Holders, has
previously filed a Deed of Trust, Assignment of Production,
and Financing Statement of record (a "Lien") on Borrower's
working and overriding royalty interests in the McElmo Dome
Unit in Montezuma and Xxxxxxx Counties of Colorado (the
"Interests"). Although the other Note Holders have been
repaid in full as of this date, the Lien has not been re-
leased even though such Note Holders no longer have an
interest therein. Moreover, on May 21, 2004, Xxxxxxxxx
Family LLC ("Xxxxxxxxx") made a loan to the Lender, and a
new Deed of Trust, Assignment of Production, and Financing
Statement has been placed of record which has placed a Lien
on both Lender's and Borrower's Interests in the McElmo Dome
Unit and will determine the relative rights as to proceeds
under the Deed of Trust as between Lender and Xxxxxxxxx.
7. COVENANT: Until the Indebtedness has been paid in full, the
Borrower will not sell, transfer, convey or otherwise
dispose of, all or a substantial portion of its assets now
owned or hereafter acquired, whether pursuant to a single
transaction or a series of transactions, and the
Borrower will not merge or consolidate with any person
or entity or permit any such merger or consolidation
with the Borrower. This paragraph specifically excludes
asset sales incurred in the normal course of business.
8. EVENTS OF
DEFAULT: If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
A. Failure of the Borrower to pay when due any amounts,
including principal or interest on the Note (whether
at the stated maturity, upon acceleration or
otherwise).
B. Any Event of Default as specified in the Note
C. Any default or breach in the performance of any
covenant, obligation, representation, warranty or
provision contained in this Letter Loan Agreement or
in the Note or in any other note or obligation of
Borrower to the Unitrust.
D. The Borrower shall: (i) apply for or consent to the
appointment of a custodian, receiver, trustee or
liquidator of the Borrower or any of its properties,
(ii) admit in writing the inability to pay, or
generally fail to pay, its debts when they come due,
(iii) make a general assignment for the benefit of
creditors, (iv) commence any proceeding relating to
the bankruptcy, reorganization, liquidation,
receivership, conservatorship, insolvency,
readjustment of debt, dissolution or liquidation of
the Borrower, or if corporate action should be taken
by the Borrower for the purpose of effecting any of
the foregoing, (v) suffer any such appointment or
commencement of a proceeding as described in clause
(i) or (iv) of this paragraph, which appointment or
proceeding is not terminated or discharged within 60
days, or (vi) become insolvent.
THEN upon the occurrence of any Event of Default described in the
foregoing paragraphs the unpaid principal amount of and accrued interest
on the Loan shall automatically become immediately due and payable,
without presentment, demand, protest or other requirements of any kind,
all of which are hereby expressly waived by Borrower.
If the foregoing terms and conditions are acceptable to you, please
acknowledge your agreement by signing below and returning one copy of
this Letter Loan Agreement to us.
Sincerely,
LENDER:
THE XXXXXXX X. XXXXX AND XX XXXXX
1988 CHARITABLE UNITRUST
/s/ Xxxxxxx X. Xxxxx /s/ Xx Xxxxx
____________________________ _________________________
Xxxxxxx X. Xxxxx, Trustee Xx Xxxxx, Trustee
Accepted effective this 1st day of April, 2005.
BORROWER:
THE XXXXX COMPANY
/s/ Xxxx Xxx, Xx.
___________________________
Xxxx Xxx, Xx., President
