NONRECOURSE SECURED
PROMISSORY NOTE
$1,438,560.00 April 10, 1996
FOR VALUE RECEIVED, the undersigned promises to pay to the order of CIBOLA
CORPORATION, a Wyoming corporation, at its office in Cheyenne, Wyoming, or at
such other place as may be designated in writing by the holder of this note,
the principal sum of ONE MILLION, FOUR HUNDRED AND THIRTY-EIGHT THOUSAND,
FIVE HUNDRED AND SIXTY DOLLARS ($1,438,560.00), together with accrued but
unpaid interest on the outstanding principal balance at the rate of eight
and one-quarter percent (8 1/4%) per annum, on June 30, 2006 (the "Maturity
Date").
Payments of accrued interest shall be due and payable on the first
business day of each April and October, commencing on October 1, 1996.
The undersigned has no in personam liability for the payment of this Note.
Payment of this Note is secured by a security agreement (the "Security
Agreement") of even date herewith whereby the undersigned has granted the
holder of this Note a security interest in all of its common stock of Cibola
Corporation, a Wyoming corporation, (the "Collateral"). In the event of a
default under this Note, the holder hereof shall only have recourse to the
Collateral.
While any default exists hereunder, all sums herein promised to be paid
shall bear interest at the rate of thirteen and one-quarter percent (13 1/4%),
accrued from the date of default to the date on which such default is cured to
the satisfaction of the holder hereof. All past due sums will be paid at the
time of and as a condition precedent to the curing of any default hereunder.
During the existence of any such default, the holder of this Note may apply
payments received on any amount due hereunder or under the terms of any
instrument now or hereafter evidencing or securing any of said indebtedness as
said holder may determine.
Upon default in any of the monetary terms or conditions of this Note and
failure of the undersigned to cure such default within five (5) business days
after written notice from the holder of this Note, or upon the occurrence of
any other event of default not cured within any applicable cure period, at
the option of the holder hereof the entire indebtedness hereby evidenced
shall become due, payable, and collectible then or thereafter as the
holder may elect.
The undersigned agrees that if, and as often as, this Note is placed in
the hands of an attorney for collection or to defend or enforce any of the
holder's rights hereunder or under the Security Agreement, the undersigned
will pay to the holder hereof its reasonable attorney's fees, together with
all court costs and other expenses paid by such holder.
For the purpose of computing interest under this Note, payments of all
or any portion of the principal sum owing under this Note will not be deemed
to have been made until such payments are received by the holder of this Note
in collected funds.
All agreements between the undersigned and the holder of this Note are
expressly limited so that in no event whatsoever, whether by reason of
disbursement of the proceeds hereof or otherwise, shall the amount of
interest or finance charge (as defined by the laws of the State of Wyoming)
paid or agreed to be paid by the undersigned to the holder hereof exceed
the highest lawful contractual rate of interest or the maximum finance charge
permissible under the law which a court of competent jurisdiction, by final
non-appealable order, determines to be applicable hereto. If fulfillment of
any agreement between the undersigned and the holder hereof, at the time the
performance of such agreement becomes due, involves exceeding such highest
lawful contractual rate or such maximum permissible finance charge, then
the obligation to fulfill the same shall be reduced so that such
obligation does not exceed such highest lawful contractual rate or maximum
permissible finance charge. If by any circumstance the holder shall ever
receive as interest or finance charge an amount which would exceed the amount
allowed by applicable law, the amount which may be deemed excessive shall
be deemed applied to the principal of the indebtedness evidenced hereby
and not to interest. All interest and finance charges paid or agreed to
be paid to the holder hereof shall be prorated, allocated and spread
throughout the full period of this Note. The terms and provisions of this
paragraph shall control all other terms and provisions contained herein and
in any of the other documents executed in connection herewith. If any
provision of this Note or the application thereof to any party or
encumbrance is held invalid or unenforceable, the remainder of this Note and
the application of such provision to other parties or circumstances shall
not be affected thereby, the provisions of this Note being severable in any
such instance.
The undersigned and any endorsers, sureties, guarantors, and all other
persons, if any, who may become liable for all or any part of this obligation
severally waive presentment for payment and protest. Said parties consent
to any extension of time (whether one or more) of payment hereof, any renewal
(whether one or more) hereof, and any release of any party liable for, or any
property securing, payment of this obligation. Any such extension, renewal,
or release may be made without notice to any such party and without dis-
charging said party's liability hereunder.
The failure of the holder hereof to exercise any of the remedies or options
set forth in this Note, or any agreement relating to this Note, upon the occur-
rence of one or more of the events of default, shall not constitute a waiver
of the right to exercise the same or any other remedy at any subsequent time
in respect to the same or any other event of default. The acceptance by the
holder hereof of any payment that is less than the total of all amounts
due and payable at the time of such payment shall not constitute a waiver of
the right to exercise any of the foregoing remedies or options at that time or
any subsequent time, or nullify any prior exercise of any such remedy or option,
without the express written consent of the holder hereof, except as and to the
extent otherwise provided by law.
This Note may not be assigned or transferred by the undersigned without
the express written consent of the holder of this Note.
The written records of the holder of this Note shall be prima facie
evidence of the amount owing on this Note.
This Note is to be construed according to the laws of the State of
Wyoming.
IN WITNESS WHEREOF, the undersigned has executed this instrument on the
date noted above.
THE BEARD COMPANY,
an Oklahoma corporation
By: HERB MEE, JR.
Herb Mee, Jr.
President