Exhibit 10.1
March 3, 2006
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, and as further
restated and amended by the parties on April 1, 2005.
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 (which has been styled as the "SECOND REPLACEMENT RENEWAL AND
EXTENSION PROMISSORY NOTE") has been dated February 14, 2005 because it
was on that date that all accrued interest on a 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, 2008.
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 released
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 3rd day of March, 2006.
BORROWER:
THE XXXXX COMPANY
/s/Xxxx Xxx, Xx.
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Xxxx Xxx, Xx., President
