Interim Credit Agreement
Exhibit 10.1
Dated
as
of: November 20, 2006
Borrower:
Standard Drilling, Inc., a Nevada corporation
Lender:
Xxxxxxx X. Xxxxxxxxx, Xx.
Loan
amount: In an initial aggregate principal amount of one million dollars
($1,000,000.00), which may be increased to a maximum aggregate principal amount
of five million dollars ($5,000,000).
1. Lender
agrees to loan to Borrower in an initial aggregate principal amount of
$1,000,000.00, which may be increased to a maximum aggregate principal amount
of
$5,000,000 in Lender’s sole discretion, in lump sum or in installments in
accordance with this agreement.
2. Borrower
shall execute a promissory note or notes evidencing the indebtedness (“Demand
Note”) in an initial aggregate principal amount of $1,000,000.00, which may be
increased to a maximum aggregate principal amount of $5,000,000 together with
interest on the unpaid principal amount at the rate of 10% per annum, compounded
monthly. Additional Demand Notes may be issued if the loan amount is increased
by Lender in accordance with the terms hereof. Interest shall be calculated
on
an the basis of a year of 365 or 366 days, as applicable, and charged for the
actual number of days elapsed and accrued, but unpaid interest, shall be payable
in full upon demand.
3. Borrower
may request loans from time to time from Lender in accordance with this
Agreement and the Demand Note; provided,
that
the aggregate amount of all loans outstanding hereunder and under the Demand
Note shall not exceed an aggregate principal amount of $5,000,000.00. Lender
may, in its sole discretion, loan the requested amounts to Borrower according
to
the terms of this agreement and the Demand Note. Nothing herein or in the Demand
Note shall be construed as requiring Lender to comply with any request by
Borrower for any additional loan amount if in the Lender’s judgment the
requested amount should not be honored.
4. This
agreement may be terminated by either Lender or Borrower at any time.
Termination by either party shall not release, discharge or modify the
indebtedness owed to Lender from Borrower.
5. The
Borrower shall execute and deliver to Lender a Security Agreement of even date
herewith substantially in the form attached hereto as Exhibit A (the “Security
Agreement”), pursuant to which the Borrower shall grant to the Lender a lien and
security interest in and to the Collateral (as defined in the Security
Agreement) to secure payment of the Demand Note.
6. Amounts
loaned by Lender hereunder shall be used for general corporate and working
capital purposes.
7. Borrower
represents as follows:
(a)
Borrower is Nevada corporation in good standing.
(b)
Borrower is authorized by its constituent documents and applicable law to enter
into this agreement.
(c)
All
information provided by Borrower to Lender, including financial reports, is
true
and correct.
(d)
Borrower’s execution of this agreement and amounts loaned by Lender, if any, do
not violate or conflict with any covenant or condition of Borrower under any
other credit agreement, note, regulation, or law.
8. All
amounts outstanding under this agreement shall be repaid in full upon demand
by
the Lender at any time after the date which is ninety (90) days from the date
hereof. The Borrower shall have the right to prepay the loan in whole or in
part
at any time without penalty. Amounts repaid may not be reborrowed.
9. Borrower
covenants and agrees that it will:
(a)
Keep
accurate financial records of all business operations, and provide Lender with
any financial reports or statements requested by Lender.
(b)
Permit inspections of Borrower’s books, records, premises, and assets by
Lender.
(c)
Promptly notify Lender of any threatened litigation or change in business
conditions that may adversely affect Borrower.
10. Borrower
covenants and agrees that it will not:
(a)
Encumber or permit any mortgages, security interests, or other encumbrances
to
be assessed against its assets without prior written Lender’s
consent.
(b)
Increase salaries of any officers during the term of this loan, except with
prior written consent of Lender.
(c)
Declare any dividends or distributions without prior written consent of
Lender.
11. It
shall
be a default by Borrower: (1) to breach any of the foregoing covenants; or
(2)
to fail to pay all liabilities (as defined in the Demand Note) due to Maker
upon
demand.
12. On
the
occurrence of any event of default, all obligations under this loan will
immediately become due and payable on demand of Lender without presentation,
demand for payment, notice of dishonor, protest, or notice of protest of any
kind, all
of which are expressly waived by the Borrower.
Lender
will have all remedies provided by the Texas Business and Commerce Code, as
well
as all other remedies available at law or equity, and provided under this loan
agreement and related agreements and instruments.
13. Lender's
failure or delay to exercise any right or privilege under this agreement will
not operate as a waiver of any such right or privilege or any further exercise
of the right or privilege.
14. All
notices, consents, requests, demands and other communications hereunder shall
be
given to or made upon the respective parties hereto at their respective
addresses set forth beneath their respective signatures below or, as to any
party, at such other address as may be designated by it in a written notice
to
the other party. All notices, requests, consents and demands hereunder shall
be
effective (a) upon personal delivery, or (b) one (1) Business Day after deposit
with a nationally-recognized overnight courier service, or (c) three (3)
Business Days after deposit with registered or certified, first class mail,
postage prepaid.
15. This
agreement shall be governed by the laws of the State of Texas. The obligations
of the Debtor under this agreement and any Demand Note are performable in Xxxxxx
County, Texas. Any suit, action or proceeding against the Borrower with respect
to this agreement or any Demand Note or any judgment entered by any court in
respect thereof, may be brought in the courts of the State of Texas, County
of
Xxxxxx, or in the United States courts located in Xxxxxx County, Texas and
the
Borrower hereby submits to the non-exclusive jurisdiction of such courts for
the
purpose of any such suit, action or proceeding. The Borrower hereby irrevocably
consents to service of process in any suit, action or proceeding in said court
by the mailing thereof by the Lender by registered or certified mail, postage
prepaid, to the Borrower, at the address for notices as set forth beneath the
Borrower’s signature hereto. The Borrower hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any
suit,
action or proceeding arising out of or relating to this agreement or any Demand
Note brought in the courts located in the State of Texas, County of Xxxxxx,
and
hereby further irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
16. This
agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this agreement by signing any such counterpart.
17. This
agreement and the Demand Note set out the entire agreement of the
parties.
18.
If any
part of this agreement is held to be invalid, all other parts will continue
in
effect as if the invalid provision had never been included.
In
witness hereof, the parties have executed this agreement as of November 20,
2006.
LENDER
Xxxxxxx
X. Xxxxxxxxx, Xx. [name]
By:/S/Xxxxxxx
X. Xxxxxxxxx, Xx. [signature]
Xxxxxxx
X. Xxxxxxxxx, Xx. [typed
name and title]
Address
for Notices:
Date: 11/27/06
BORROWER
Standard
Drilling, Inc. [name]
By:
/S/Xxxxxx X. Xxxxx, Xx. [signature]
Xxxxxx
X.
Xxxxx, Xx., President and COO [typed
name and title]
Address
for Notices:
