Filed by Bowne Pure Compliance



 




Exhibit 10.31




December 19, 2007




Amerex Companies, Inc.

406 South Boulder

Suite 820

Tulsa, Oklahoma

Attn: Nicholas Malino, Chief Executive Officer




Dear Nick:



Reference is hereby made to (i) the Senior Secured Convertible Note due November 21, 2007
(as amended, the “Note”) and the Revolving Credit Note (the “Revolver”) in the aggregate
outstanding principal amounts of $6,131,235 and $1,500,000, respectively, of Amerex Companies,
Inc. (the “Company”) to CAMOFI Master LDC (“CAMOFI”) and (ii) the additional transactions
documents related thereto (the “Transaction Documents”). In consideration of CAMOFI agreeing to
extend the Maturity Date of the Note and to defer certain principal and interest payments and
for other consideration, the receipt of which is hereby acknowledged by the Company, the
Company and CAMOFI hereby agree as follows:




	 	1.	 	The Maturity Date of the Note shall be changed from November 21, 2007 to November 21,
2010 or such earlier date as the Note is required or permitted to be repaid as provided
thereunder.

	 
	 	2.	 	The interest payments pursuant to the Note due on January 1, 2008, February 1,
2008, and March 1, 2008 shall be deferred until April 1, 2008, at which time such full
amounts as well as the April 1, 2008 interest payment shall be due and payable.

	 
	 	3.	 	The interest rate shall increase from 10% payable in cash to 10% payable in cash
and 2% payable in additional notes.

	 
	 	4.	 	The aggregate principal balance of the Note and the Revolver as of the date
hereof shall remain the same. The Company shall issue a new Note to CAMOFI in
principal amount of $2,027,123 (the “New Note”) having the same terms as the
outstanding Note.

	 
	 	5.	 	Covenants on the Note shall include limitations on indebtedness, liens,
dividends, transactions with affiliates, and will require that the Company have at a
minimum monthly EBITDA of $400,000 for each of the month ended August 31, 2008 and for
each of the remaining months through the end of 2008 as well as a minimum annual
EBITDA of $2,500,000 for each of the years ended December 31, 2008 and December
31, 2009.

	 
	 	6.	 	The definition of “Monthly Redemption Amount” is hereby deleted in its entirety
and the following new definition is substituted in lieu thereof.

	 
	 	 	 	“Monthly Redemption Amount” shall mean, as to a Monthly Redemption in respect of
the Notes and the New Note, $250,000. In the event that CAMOFI receives a minimum of
$3,000,000 in respect of the sale of the Kaiser facility and other excess real estate
assets, including, without limitation, its Harrison County Texas property, the Monthly
Redemption Amount shall be reduced to $150,000. All such amounts shall be made
proportionally to the amounts outstanding under the Notes and the New Note,
respectively.





 


 









 






	 	7.	 	The definition of “Monthly Redemption Date” is hereby deleted in its entirety and
the following new definition is substituted in lieu thereof.

	 
	 	 	 	“Monthly Redemption Date” means the first day of each month, commencing on the first
day of August 1, 2008, unless sooner as provided herein.

	 
	 	8.	 	The Company shall promptly pay to CAMOFI 100% of any proceeds that it receives as
a result of the sale of its Kaiser facility and other excess real estate assets,
including, without limitation, its Harrison County Texas property. In addition, the
Company will pay the $400,000 currently held in escrow for the closure of the
injection wells on its Kaiser facility. Such proceeds shall be applied to repay the
Notes at the price set forth in Section 2(t), (i.e., 115%). Agents to sell such
assets will be retained by no later than January 15, 2008 and all such assets will be
in contract to be sold on terms satisfactory to CAMOFI by April 30, 2008 or sooner.

	 
	 	9.	 	There shall be added to the affirmative covenants of the Note a covenant by the
Company to raise at least $2.5 million of equity on terms satisfactory to CAMOFI by
March 31, 2008.

	 
	 	10.	 	The term “Filing Date” as such term is defined in the Registration Rights Agreement
shall be amended to the earlier of (i) the filing of a registration statement in respect of
the next offering by the Company of its equity securities and (ii) June 30, 2008. The term
“Effectiveness Date” as such term is defined in the Registration Rights Agreement shall be
amended to the earlier of (i) 90 days after the Filing Date and (ii) September 30, 2008.
The term “Registrable Securities” as such term is defined in the Registration Rights
Agreement shall be amended to include the equity underlying the New Note.

	 
	 	11.	 	Anything to the contrary in the Note or any other agreement notwithstanding, CAMOFI
shall have the right to convert up to 100% of the Note into Common Stock. The Company
further agrees to give CAMOFI at least ten Business Days prior notice prior to any
prepayments or repayments pursuant to the Note, during which time CAMOFI shall have the
right to convert all or any portion of its Note into Common Stock.

	 
	 	12.	 	The Company shall promptly issue to CAMOFI 4.5% of the Company’s outstanding common
stock. To the extent that the shares are not registered such shares will be included as
“Registrable Securities” in the Registration Rights Agreement and included in the
registration statement to be filed pursuant to such agreement.

	 
	 	13.	 	The Company agrees to extend the term of all of CAMOFI’s Warrants to five years from
the date hereof.

	 
	 	14.	 	The Company shall make available to CAMOFI (or its representatives) its executive
officers and its financial personnel for an on-site review of the financial condition of
the Company (including a detailed analysis of its expenses). The Company shall reimburse
CAMOFI for all costs and expenses related to such review.





 


 









 





Based on the foregoing, the Company and CAMOFI acknowledge and agree that, as of the date
hereof, each party is in good standing under the Note, the Registration Rights Agreement and
the
Transaction Documents and that, as of the date hereof, there are no defaults under the Note,
the Registration Rights Agreement or any of the Transaction Documents by either party.



If this letter is accordance with your understanding, please sign your name in the
space provided below.



Very truly yours,




Jeffrey Haas

Portfolio Manager




ACCEPTED AND AGREED TO:




Amerex Companies, Inc.




By: 

Name: Nicholas J. Malino

Title: CEO