[LETTERHEAD OF HONDO OIL & GAS COMPANY APPEARS HERE]
December 22, 1995
Lonrho Plc
Thamesedge Ltd.
4 Grosvenor Place
London, England SW1X 7DL
Dear Sirs:
This Agreement is entered into by and among HONDO OIL & GAS COMPANY, a
Delaware corporation ("Hondo"), and its wholly-owned subsidiaries, VIA
VERDE DEVELOPMENT COMPANY, a California corporation ("Via Verde"), and
NEWHALL REFINING CO., INC., a Delaware corporation ("Newhall"), LONRHO PLC
("Lonrho") and THAMESEDGE LTD. ("Thamesedge"), with reference to:
(a) Note Purchase Agreement dated November 28, 1988, between
Pauley Petroleum Inc. (now Hondo) and Thamesedge, as amended (the
"Thamesedge Note Purchase Agreement"), and Note dated November 30,
1988, for $75,000,000 from Pauley Petroleum Inc. to Thamesedge (the
"Thamesedge Note");
(b) Letter agreements dated November 28, 1988 and December 18,
1992 between Hondo and Thamesedge referring to and amending the
Thamesedge Note Purchase Agreement and the Thamesedge Note;
(c) Net Profits Share Agreement dated December 18, 1992, by and
among Hondo, Lonrho and Thamesedge (the "Net Profits Share
Agreement");
(d) Amended and Restated Letter Agreement dated December 20,
1991, between the Company and Lonrho (the "Lonrho Loan Agreement") and
Notes dated September 1, 1991, for $10 million, November 1, 1991, for
$9,000,000, and December 20, 1991, for $13,000,000, from Hondo to
Lonrho (the "Lonrho Notes");
(e) Letter agreement dated December 18, 1992 between Hondo and
Lonrho referring to and amending the Lonrho Loan Agreement and the
Lonrho Notes;
(f) Amended and Restated Guaranty of Robert O. Anderson dated
June 20, 1991, and Amendment to Amended and Restated Guaranty of
Robert O. Anderson dated December 20, 1991, guaranteeing the payment
of the Lonrho Notes described in paragraph (d), above (the "Anderson
Guaranty");
(g) Note dated April 30, 1993, for $3,000,000 from Via Verde to
Lonrho (the "Via Verde Note"), secured by Deed of Trust dated recorded
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Lonrho Plc and Thamesedge, Ltd.
December 22, 1995
Page 2
as Instrument No. 93-840817 in the Real Property Records of Los
Angeles County, California, (the "Via Verde Mortgage"), guaranteed by
Hondo in Guaranty dated April 30, 1993 (the "Hondo Guaranty"), and
subject to a letter agreement dated April 30, 1993;
(h) Note dated June 25, 1993, for $4,000,000 from Hondo to
Lonrho (the "Valley Gateway Note"), secured by Deed of Trust dated
August 30, 1993, granted by Hondo and Newhall, recorded as Instrument
No. 93-2006475 in the Real Property Records of Los Angeles County,
California, (the "Valley Gateway Mortgage");
(i) Letter Agreement dated December 17, 1993, between Hondo, Via
Verde, Newhall, and Lonrho and Thamesedge, restructuring the above-
described indebtedness and amending the Thamesedge Note, the Lonrho
Notes, the Via Verde Note and the Valley Gateway Note;
(j) Letter Agreement dated November 10, 1994, between Hondo, Via
Verde and Newhall, and Lonrho and Thamesedge, restructuring again the
above-described indebtedness, amending the Thamesedge Note, the Lonrho
Notes, the Via Verde Note and the Valley Gateway Note, and creating a
new $5,000,000 loan facility and a Note therefor dated October 31,
1994 (the "Facility Note");
The Thamesedge Note, the Lonrho Notes, the Via Verde Note and the
Valley Gateway Note, each as amended, and the Facility Note are
collectively referred to herein as the "Lonrho Indebtedness".
Hondo, Lonrho and Thamesedge have agreed to extend the date of
repayment for the Lonrho Indebtedness (i) by changing the mandatory
redemption dates on the Thamesedge Note from November 1, 1996, 1997 and
1998, with an amount due on each date equal to one third of the aggregate
principal of the Original Notes outstanding at November 1, 1996, plus
accrued interest to each redemption date, to November 1, 1997 and 1998,
with an amount due on each date equal to one half of the aggregate
principal of the Original Notes outstanding at November 1, 1997, plus
accrued interest to each redemption date; and (ii) extend the principal
repayment date of each of the Lonrho Notes, the Via Verde Note, the Valley
Gateway Note and the Facility Note from October 1, 1996 to October 1, 1997.
Hondo, Via Verde and Newhall, and Lonrho and Thamesedge hereby agree,
as follows:
1. Effective Date. This Agreement shall be effective for all
purposes on September 30, 1995.
2. Amendment of Notes. The Thamesedge Note, the Lonrho Notes
(collectively), the Via Verde Note, the Valley Gateway Note and the
Facility Note each will be amended as provided, respectively, in Exhibits
A, B, C, D and E to this Agreement. Hondo and Via Verde, as applicable,
will execute the note amendments, Lonrho and Thamesedge, as applicable,
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Lonrho Plc and Thamesedge, Ltd.
December 22, 1995
Page 3
will execute them to acknowledge consent thereto, and the note amendments
will be attached to the original notes held by Lonrho or Thamesedge.
3. Effect on Other Agreements. Except as amended by the note
amendments, the terms and provisions of the above-described agreements
relating to the Lonrho Indebtedness shall remain in full force and effect,
including, without limiting the generality of the foregoing, the Letter
Agreements dated December 17, 1993 and November 10, 1994.
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
HONDO OIL & GAS COMPANY
By: /s/ C.B. McDaniel
----------------------------------
C.B. McDaniel, Secretary & Counsel
VIA VERDE DEVELOPMENT COMPANY
By: /s/ C.B. McDaniel
----------------------------------
C.B. McDaniel, Secretary
NEWHALL REFINING CO., INC.
By: /s/ C.B. McDaniel
----------------------------------
C.B. McDaniel, Secretary
Confirmed and accepted as of the date first above written:
LONRHO PLC
By: /s/ John F. Price
--------------------
John F. Price
Authorized signatory
THAMESEDGE LTD.
By: /s/ John F. Price
--------------------
John F. Price
Authorized signatory
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Exhibit A
Thamesedge Note
This Note Amendment dated September 30, 1995 amends that certain 13
1/2% Senior Subordinated Note due 1998 dated November 28, 1998 in the
original principal amount of US $75,000,000, from Pauley Petroleum Inc.
(now Hondo Oil & Gas Company), to Thamesedge Ltd., as amended by Note
Amendments dated September 30, 1993 and September 30, 1994 (the "Original
Note"), and is attached to the Original Note. Effective on September 30,
1995, the Original Note is amended as follows:
1. Principal Amount. The principal amount of the Original Note now
owing is US $__________.
2. Principal Repayment. The mandatory Redemption dates on the
Original Note are amended to November 1, 1997 and November 1, 1998,
with an amount due on each date equal to one half of the aggregate
principal of the Original Note outstanding at November 1, 1997, plus
interest accrued to each redemption date.
3. Letter Agreement. This Note Amendment is issued and delivered
under that certain letter agreement dated December 22, 1995, by and
among Hondo Oil & Gas Company, Via Verde Development Company, Newhall
Refining Co. Inc., Thamesedge Ltd.
HONDO OIL & GAS COMPANY
By:_________________________
John J. Hoey, President
The undersigned hereby acknowledges and consents to this Note
Amendment.
THAMESEDGE LTD.
By:_________________________
Name: _____________________
Title:______________________
Exhibit B
Lonrho Notes
This Note Amendment dated September 30, 1995 amends those certain
Promissory Notes dated September 1, 1991, in the original principal amount
of US $10,000,000, dated November 1, 1991, in the original principal amount
of US $9,000,000, and dated December 20, 1991, in the original principal
amount of US $13,000,000, each from Hondo Oil & Gas Company, to Lonrho Plc,
as amended by Note Amendments dated September 30, 1993 and September 30,
1994 (the "Original Notes") and is attached to the Original Notes.
Effective on September 30, 1995, each of the Original Notes is amended as
follows:
1. Principal Amount. The aggregate principal amount of the Original
Notes now owing is US $_____________.
2. Principal Repayment. The principal of the Original Notes is
payable on October 1, 1997.
4. Letter Agreement. This Note Amendment is issued and delivered
under that certain letter agreement dated December 22, 1995, by and
among Hondo Oil & Gas Company, Via Verde Development Company, Newhall
Refining Co. Inc., Thamesedge Ltd. and Lonrho Plc.
HONDO OIL & GAS COMPANY
By:_________________________
John J. Hoey, President
The undersigned hereby acknowledges and consents to this Note
Amendment.
LONRHO PLC
By:_________________________
Name: _____________________
Title:______________________
Exhibit C
Via Verde Note
This Note Amendment dated September 30, 1995 amends that certain
Promissory Note dated April 30, 1993 in the original principal amount of US
$3,000,000, from Hondo Oil & Gas Company to Lonrho Plc, as amended by Note
Amendments dated September 30, 1993 and September 30, 1994 (the "Original
Note") and is attached to the Original Note. Effective on September 30,
1995 the Original Note is amended as follows:
1. Principal Amount. The principal amount of the Original Note now
owing is US $_____________.
2. Principal Repayment. The principal of this note is payable on the
earlier of (i) the sale of the property securing the loan or (ii) in
ten (10) semi-annual installments, commencing on October 1, 1997.
5. Letter Agreement. This Note Amendment is issued and delivered
under that certain letter agreement dated December 22, 1995, by and
among Hondo Oil & Gas Company, Via Verde Development Company, Newhall
Refining Co. Inc., Thamesedge Ltd. and Lonrho Plc.
VIA VERDE DEVELOPMENT COMPANY
By:_________________________
John J. Hoey, President
The undersigned hereby acknowledges and consents to this Note
Amendment.
LONRHO PLC
By:_________________________
Name: _____________________
Title:______________________
Exhibit D
Valley Gateway Note
This Note Amendment dated September 30, 1995 amends that certain
Promissory Note dated June 25, 1993 in the original principal amount of US
$3,000,000, from Hondo Oil & Gas Company to Lonrho Plc, as amended by Note
Amendments dated September 30, 1993 and September 30, 1994 (the "Original
Note") and is attached to the Original Note. Effective on September 30,
1995 the Original Note is amended as follows:
1. Principal Amount. The principal amount of the Original Note now
owing is US $_____________.
2. Principal Repayment. The principal of this note is payable on the
earlier of (i) the sale of the property securing the loan or (ii) in
ten (10) semi-annual installments, commencing on October 1, 1997.
5. Letter Agreement. This Note Amendment is issued and delivered
under that certain letter agreement dated December 22, 1995, by and
among Hondo Oil & Gas Company, Via Verde Development Company, Newhall
Refining Co. Inc., Thamesedge Ltd. and Lonrho Plc.
HONDO OIL & GAS COMPANY
By:_________________________
John J. Hoey, President
The undersigned hereby acknowledges and consents to this Note
Amendment.
LONRHO PLC
By:_________________________
Name: _____________________
Title:______________________
Exhibit E
Facility Note
This Note Amendment dated September 30, 1995 amends that certain
Promissory Note dated October 31, 1994, in the original principal amount of
US $5,000,000 from Hondo Oil & Gas Company, to Lonrho Plc (the "Original
Note") and is attached to the Original Note. Effective on September 30,
1995, the Original Note is amended as follows:
1. Principal Amount. The aggregate principal amount of the Original
Notes now owing is US $_____________. There remains US$_____________
of principal on this note which has not been advanced to the borrower
as of September 30, 1995.
2. Principal Repayment. The principal of the Original Note is
payable on October 1, 1997.
4. Letter Agreement. This Note Amendment is issued and delivered
under that certain letter agreement dated December 22, 1995, by and
among Hondo Oil & Gas Company, Via Verde Development Company, Newhall
Refining Co. Inc., Thamesedge Ltd. and Lonrho Plc.
HONDO OIL & GAS COMPANY
By:_________________________
John J. Hoey, President
The undersigned hereby acknowledges and consents to this Note
Amendment.
LONRHO PLC
By:_________________________
Name: _____________________
Title:______________________