PROMISSORY NOTE
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FOR VALUE RECEIVED, the undersigned, HONDO OIL & GAS COMPANY, a
Delaware corporation (the "Borrower"), hereby promises to pay to the
order of THAMESEDGE, LTD., a United Kingdom corporation (the "Lender")
on January 1, 1999 the principal sum of $20,500,000 or, if less than
$20,500,000, the aggregate unpaid principal amount of all Advances (as
defined below), made by the Lender to the Borrower pursuant to the
Agreement (as defined below) together with all accrued but unpaid
interest and all interest added to the principal of this Note.
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such
principal amount is paid in full, at the rate per annum equal at all
times to 13% (or the maximum interest rate permitted by law, whichever
is less) on each October 1 and April 1 until maturity; provided,
however, that any amount of principal on Advances that are not paid when
due (whether at stated maturity, by acceleration or otherwise) shall
bear interest from the date on which such amount is due until such
amount is paid in full, payable on demand, at a rate per annum equal at
all time to 18% (or the maximum interest rate permitted by law,
whichever is less).
As used herein, "Business Day" means any day of the year on which
banks are not required or authorized to close in London or Houston,
Texas. All computations of interest shall be made by the Lender on the
basis of a year of 360 days and the actual number of days occurring in
the period from which such interest is payable. Whenever any payment
hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest.
Both principal and interest are payable not later than 12:00 noon
London time on the day when due in lawful money of the United States of
America to the Lender at such account and place as Lender shall
designate in immediately available funds. Each Advance made by the
Lender to the Borrower pursuant to the Agreement, and all payments made
on account of principal thereof, may, but need not be recorded by the
Lender on its books and records on the grid attached hereto and such
books and records shall be conclusive as to the existence and amounts
thereof absent manifest error. Failure to make any such entry or
endorsement shall not effect the actual principal amount outstanding or
the enforceability of this Note.
This Note is the "Note" referred to in, and is entitled to the
benefits of, the Amended and Restated Revolving Credit Agreement between
the Borrower and the Lender dated as of July 2, 1997 (the "Agreement").
The Agreement, among other things: (1) provides for the making of
advances (the "Advances") by the Lender to the Borrower and (2)
contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and
conditions specified therein.
This Note is a renewal and replacement of that certain other note
in the amount of $13,500,000 from Borrower to Lender dated as of June
28, 1996.
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This Note is guaranteed by the Amended and Restated Guaranty of
Hondo Xxxxxxxxx Oil & Gas Limited dated as of July 2, 1997.
This Note shall be governed by, and construed in accordance with,
the laws of the State of New York (without giving effect to New York's
principles of conflicts of law, other than Title 14 of Article 5 of New
York's General Obligations Law).
The Borrower hereby irrevocably submits to the jurisdiction of any
New York State or United States Federal court sitting in New York City
over any action or proceeding arising out of or relating to this Note or
the Agreement, and hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in such New
York State or Federal court. The Borrower irrevocably consents to the
service of any and all process in any such action or proceeding by
sending copies of such process to it at its address and in the manner
determined under Section 7.02 of the Agreement. The Borrower agrees
that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. The Borrower further
waives any objections to venue in such State and any objection to an
action or proceeding in such State on the basis of forum non conveniens.
The Borrower further agrees that any action or proceeding brought by it
against the Lender shall be brought only in New York State or United
States Federal court sitting in New York County, New York. The Borrower
and the Lender waive any right it may have to jury trial.
Nothing herein shall affect the right of the Lender to serve legal
process in any other manner permitted by law or affect the right of the
Lender to bring any action or proceeding against the Borrower or any of
its properties in the courts of any other jurisdictions.
To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process
(whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to
itself or its property, the Borrower hereby irrevocable waives such
immunity in respect of its obligations under the Credit Documents.
HONDO OIL & GAS COMPANY
By: /s/ X. X. Xxxx
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Xxxx X. Xxxx
President and CEO
SCHEDULE TO NOTE
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Amount of Principal Principal Notation
Date Advance Paid Outstanding Made By
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