CUSIP No. 438138-10-9 Page 25 of 39 Pages
EXHIBIT 10
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REVISED SETTLEMENT AGREEMENT
This Revised Settlement Agreement entered into as of this 20th day of
December, 1995 ("the Revision" or the "Agreement") between Lonrho Plc
("Lonrho"), Lonrho, Inc ("LI"), Scottsdale Princess, Inc ("SPI") (Lonrho, LI and
SPI being collectively hereafter referred to as "The Lonrho Group"), Xxxxxx 0.
Xxxxxxxx ("XXX"), W Xxxxxx Xxxxxxxx ("WPA") and Xxxxxx X Xxxxxxxx ("RBA") (ROA,
WPA and RBA being collectively referred to as "The Andersons") and The Hondo
Company ("Hondo") the Lonrho Group, The Andersons and Hondo being collectively
hereafter referred to as "the parties".
WHEREAS in October 1986, LI purchased what is now 50% of Hondo, then known
as The Diamond A Cattle Company ("Hondo") and simultaneously entered into a
Shareholders Agreement;
WHEREAS as of the date hereof Hondo owns 10,150,200 of the shares of Hondo
Oil & Gas ("HOG"), being approximately 75% of the outstanding shares of HOG;
WHEREAS as of July 31, 1995, Hondo owed The Andersons on various loans the
following amounts:
RBA $ 36,847.46
ROA d/b/a South Spring Company 9,442,956.49
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"The Xxxxxxxx Loans" 9,479,803.95
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CUSIP No. 438138-10-9 Page 26 of 39 Pages
WHEREAS as of July 31 1995, Hondo owed the members of The Lonrho Group on
various loans, the following amounts:
Lonrho Plc $68,953,683.60
Lonrho Inc 13,541,756.26
Scottsdale Princess, Inc 2,977,210.41
Outstanding Management Fees 774,693.57
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"The Lonrho Loans" $86,247,343.84
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WHEREAS on July 6, 1993, ROA and SPI signed the Scottsdale Option Agreement
(the "Option");
WHEREAS ROA is indebted to The Bank of America and Citibank (collectively
"The Banks");
WHEREAS The Lonrho Group and The Andersons desired to resolve all
outstanding differences between them and on the 23rd day of August 1995 they
entered into a Settlement Agreement ("the Settlement"); and
WHEREAS The Lonrho Group and The Andersons desire to revise the Settlement
and to have Hondo become a party to the Revision.
NOW THEREFORE the parties hereto agree as follows:-
1) LONRHO SUPPORT. Lonrho agrees to cause Hondo to support ROA as a
Director of HOG for 5 years and Hondo will do so.
CUSIP No. 438138-10-9 Page 27 of 39 Pages
2) LOAN TO HONDO. Lonrho shall lend $9,500,000 to Hondo on such terms as
Lonrho deems appropriate.
3) USE OF LOAN OF HONDO. The parties will cause Hondo to use the loans in
2) above for the sole purpose of the repayment of $9,500,000 due on
The Xxxxxxxx Loans and this cash will be paid to The Banks in full as
directed by The Andersons. The Andersons accept that this fully repays
RBA's loan with interest.
4) ADDITIONAL LONRHO LOAN. All amounts:
a) Advanced and to be advanced under the Funding Agreement dated
October 16, 1995 and
b) Amounts advanced by Lonrho to Hondo to pay liabilities claimed to
be due and owing by Hondo to Xxx Xxxxxx and lawyers in New York
and Artesia to be settled against proper invoices
will be charged 1/2 against the amounts due ROA on his loan to Hondo.
If after this charge there remains any amount still due ROA, it will
be paid to them as soon as possible after Closing, if possible within
30 days. If the calculation produces a negative number, The Andersons
will not be assessed any deficiency.
CUSIP No. 438138-10-9 Page 28 of 39 Pages
5) SCOTTSDALE OPTION. Lonrho will exercise the Scottsdale option for
$1.00 per share.
6) GUARANTEES. All guarantees to or for the benefit of Lonrho or any
Lonrho affiliate (including Thamesedge) by ROA shall be released
including without limitations guarantees in favor of Union Bank.
7) SHARE VALUATION. The Andersons agree that at Closing their 25 percent
shareholding in Hondo is to be exchanged for 1,200,000 registered HOG
shares regardless of their then quoted price, to be divided among The
Andersons in accordance with their respective interests as follows:
ROA 60%
WPA 20%
RBA 20%
8) XXXXXXXX CALL. The Andersons acting solely through ROA or his
designated representative (i.e. WPA or RBA may not separately call)
have the right to call for 400,000 HOG shares annually for three
consecutive years beginning one year from Closing against delivery to
Hondo for redemption of 1/3rd of The Xxxxxxxx'x current shareholdings
(i.e. 1/3rd of their 25%) in Hondo. Lonrho would cause Hondo to have
available at all times 1,200,000 registered shares in HOG to give
to The Andersons against redemption of their Hondo shares
CUSIP No. 438138-10-9 Page 29 of 39 Pages
(or such reduced number of HOG shares as is required to meet the
outstanding Xxxxxxxx call). During the call period (and until
expiration of the put below), The Andersons shall not encumber their
Hondo shares (except as permitted hereunder) and they shall deliver
good, valid and unencumbered title to their Hondo shares. Hondo shall
not encumber the shares of HOG to be delivered (except as permitted
hereunder) and it shall delver good, valid and unencumbered title to
the HOG shares subject to the put and call.
9) HONDO PUT. At the end of 3 years from Closing, Hondo has the right to
put 1,200,000 registered HOG shares to The Andersons in exchange for
their 25 percent shareholding in Hondo (or a reduced number of HOG
shares to the extent The Andersons have exercised any calls under 8)
above).
10) Interest Accrual. Both The Xxxxxxxx Loan and The Lonrho Group Loans
will continue to accrue interest at their present rates and The Lonrho
Group Loans balance will increase as to principal for all additional
advances between July 31, 1995 and Closing hereunder.
11) HONDO WIND-DOWN. Hondo will cease to carry on business on 16 January,
1996 and to wind up its affairs and aspects of business if possible.
12) LIABILITIES. The only disclosed liabilities of Hondo are discussed in
4) above. ROA confirms that there are no undisclosed liabilities.
CUSIP No. 438138-10-9 Page 30 of 39 Pages
13) BANK RELEASES. ROA will, at his sole cost, obtain all necessary
consents from The Banks as may be necessary, in order to implement the
transaction contemplated and will obtain general releases from The
Banks in favor of and acceptable in form and substance to Lonrho and
Hondo.
14) LITIGATION. With respect to all pending litigation between the parties
or Hondo, so as to reduce legal fees, the parties will cause their
attorneys to advise the respective courts that settlement discussions
are in progress with a view to obtaining an indefinite extension of
time to answer all pending discovery requests, to respond to any
unanswered claims, etc., until Closing. In other words, all pending
litigation is to remain at a standstill and no party is to be
prejudiced thereby. To the extent entities other than The Andersons
and The Lonrho Group are involved (i.e. Citibank and Bank of America),
The Andersons will make best efforts to cause Citibank and Bank of
America to similarly agree to a non-prejudicial standstill agreement.
At Closing, the parties will cause all pending litigation to be
discontinued with prejudice.
15) LOAN OF HOG SHARES. Hondo will lend up to 800,000 registered shares to
The Andersons to provide security to The Andersons' bankers in
connection with loan(s) The Andersons are seeking. The security of
this loan will be The Andersons' shares in Hondo which will be
delivered to Lonrho. This share loan would be cleared by the exercise
of the call in 8) and / or the put option 9) above in due course. The
Andersons shall cause their Banks to have no rights to sell the HOG
shares until after The Andersons have called shares under 8) above or
Hondo has put the shares under 9) above, whichever shall first occur.
CUSIP No. 438138-10-9 Page 31 of 39 Pages
16) CLOSING. Closing shall occur at the offices of X.X. Xxxxx, Esq., as
set forth below, on January 5, 1996 or at such time thereafter as all
of items 2, 3, 4, 5, 6 and 13 above have already or at that time shall
occur together with the following items:
a) The Shareholders Agreement will be deemed null and void,
b) The parties will exchange mutually acceptable general releases,
c) All Directors and Officers of Hondo, other than those nominated
or approved by Lonrho, shall resign and
d) Evidence of authority to sign to be provided by all signatories,
and
17) Effectiveness. The parties agree to make best efforts to cause the
contemplated transaction to Occur as soon as possible. Time is of the
essence. This Revision is legally binding and is only subject to
condition described in 13 above. However, if for any reason whatsoever
all conditions are not satisfied by January 16, 1996, either party may
terminate this Agreement and all rights and obligations without any
liability hereunder.
CUSIP No. 438138-10-9 Page 32 of 39 Pages
18) MISCELLANEOUS.
a) Notices - Any notice, request or other communication between
parties shall be in writing and shall be delivered personally or
shall be sent by hand, facsimile or overnight Courier (e.g.
Federal Express, Airborne or similar service) as set forth below,
or to such other address as either party may hereafter designate
by notice to the other party. Communications under this Agreement
dealing with its amendment or termination, default or service of
process must be confirmed by certified / registered mail (with
receipt requested) sent as follows:
i) If to The Andersons or any of their members: Hinkle,
Cox, Xxxxx, Xxxxxxxx & Xxxxxxx 000 Xxxxxx Xxxx Xxxxx
X.X. Xxx 00 Xxxxxxx, XX 00000 Attn: Xxxxx Xxxxxx, Esq.
Fax: (000) 000 0000
ii) If to The Hondo Company: The Hondo Company X.X. Xxx
0000 000 Xxxx Xxxxxxx Xxxxxxxxx Xxxxxxx, XX 00000 Attn:
X. X. Xxxxx, Esq. Fax: (000) 000 0000
CUSIP No. 438138-10-9 Page 33 of 39 Pages
iii) If to the Lonrho Group or any of its members:
Scottsdale Princess, Inc. c/o Princess Hotels
International, Inc. 000 Xxxxx Xxxxxx, 00xx Xxxxx Xxx
Xxxx, XX 00000 Attn: X. X. Xxxxx, Esq. General Counsel
Fax: (000) 000 0000
b) No modification. Neither this Agreement, nor any of the terms
hereof, may be terminated, amended, waived or modified except by
a writing signed by The Lonrho Group and The Andersons.
c) No Broker. No broker has been engaged nor is anyone entitled to a
finders fee with respect to this transaction.
d) Entirety of Agreement. This Agreement, including any and all
Attachments hereto, constitutes the entire Agreement between the
parties hereto in respect of the matters covered hereby and
supersedes, any and all prior agreements, understandings and
communications, either oral or written, between the parties
hereto with respect to the subject matter thereof. This Revision
supersedes the Settlement in all respects.
CUSIP No. 438138-10-9 Page 34 of 39 Pages
e) No Waiver. The failure of any party at any time to require the
performance by the other of any of the terms or provisions herein
shall in no way affect the right of that party thereafter to
enforce the same; nor shall the waiver by any party of any breach
of any of the terms or provisions herein be taken or held to be a
waiver of any preceding breach of any such term or provision, or
as a waiver of the term or provision itself.
f) Successors and Assign. This Agreement shall be binding upon, and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
g) Headings. The headings of this Agreement are inserted for
convenience only and are not intended to affect the meaning of
any of the provisions hereof.
h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of
which shall constitute by one and the same instrument. This
Agreement may be delivered by fax with hard copies to follow.
i) Authority. The authority of the person executing this Agreement
to bind the party to this Agreement on behalf of the entity on
whose behalf the Agreement is executed shall be evidenced by his
signature.
CUSIP No. 438138-10-9 Page 35 of 39 Pages
j) Governing Law. This Agreement shall be construed, interpreted and
all disputes determined in accordance with, and shall be governed
by, the laws of the State of New York and all disputes shall be
determined in the courts thereof in the City of New York.
k) Construction. All parties participated in the drafting of this
Agreement so that the usual rule that all drafts are to be
construed adversely to the party drafting same shall not apply.
l) Representation. All parties acknowledge that they have been
represented by counsel with respect to the subject matter of this
Revision, are signing it voluntarily after having been duly
advised with respect to its meaning and accept its consequences.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
The Lonrho Group: The Xxxxxxxx Group:
Lonrho Plc R. 0. Xxxxxxxx
By /s/ Xxxx X. Xxxxx /s/ R. 0. Xxxxxxxx
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Xxxx X. Xxxxx
Lonrho, Inc. X. Xxxxxx Xxxxxxxx
By /s/ Xxxx X. Xxxxx /s/ X. Xxxxxx Xxxxxxxx
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Xxxx X. Xxxxx
Scottsdale Princess, Inc. Xxxxxx X. Xxxxxxxx
By /s/ Xxxx X. Xxxxx By: /s/ X. Xxxxxx Xxxxxxxx
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Xxxx X. Xxxxx Attorney-in-Fact
The Hondo Company:
By /s/ Xxxxxx X. Xxxxxxxx
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