EXTENSION AGREEMENT
EXHIBIT 10.1
This EXTENSION AGREEMENT entered into at Providence, Rhode Island, as of February 26, 2008,
between Xxxx D Oil & Gas Company, an Ohio corporation, with an address of 0000 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxx, Xxxx 00000 (the “Borrower”) and RBS
Citizens, N. A. d/b/a Charter One, a national
banking association with an address of Xxx Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 (the
“Bank”)
WHEREAS, the Bank established a revolving line of credit (the “Revolving Loan”) for Borrower
which matures on February 29, 2008 (the “Maturity Date”) respecting which Bank agreed to Lend to
Borrower upon Borrower’s request, but subject to the terms and conditions set forth in various
loan documents, of up to Nine Million Five Hundred Thousand Dollars and Zero Cents ($9,500,000.00)
(the “Revolving Loan Amount”);
WHEREAS, the Revolving Loan is evidenced by that certain Revolving Term Note, dated September
28, 2006 (as previously amended, modified or supplemented, the “Note”), by the Borrower in favor
of the Bank in the face amount of the Revolving Loan Amount;
WHEREAS, pursuant to one or more previous amendments, modifications or supplements the
original principal amount of the Note was changed to $9,500,000,00;
WHEREAS, the Note and all other documents and instruments executed in connection with or
relating to the Loan are referred to herein, collectively, as the “Loan Documents”, and all
collateral granted to the Bank to secure the Loan is referred to herein, collectively, as the
“Collateral”,
WHEREAS, the Borrower has requested and the Bank has agreed to extend the Maturity Date of the
Loan;
WHEREAS, the Borrower and the Bank have agreed to modify the Loan and the Loan Documents in
accordance with the terms of this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Bank and the Borrower mutually agree as follows.
1. EXTENSION
1.1 Recitals and Representations Accurate. The above recitals are hereby made a part of
this Agreement and the Borrower acknowledges and agrees that each of the recitals is true and correct
1.2
Ratification. All of the terms, covenants, provisions, representations, warranties, and conditions of the Loan Documents, as amended or modified hereby, are ratified, acknowledged, confirmed, and
continued in full force and effect as if fully restated herein
1.3 Maturity Date. The Bank hereby agrees to extend the Maturity Date of the Note to March
31, 2008 (the “New Maturity Date”) and accordingly, the Bank shall continue to make advances
respecting the Revolving Loan, subject to the terms and conditions of the Loan Documents, until
the New Maturity Date at which time there shall be no advances respecting the Note. On the New
Maturity Date, the Loan and all fees, costs, expenses and other amounts owing by the Borrower to
the Bank shall be due and
payable, in full, without further notice or demand. All references to the Maturity Date in
the Loan Documents shall be modified accordingly, The Borrower hereby agrees to pay to the Bank all
payments due prior to the New Maturity Date in accordance with the terms of the Note, as affected
hereby, and that any failure to make any such payments in accordance with the terms of the Note
shall be a default under this Agreement, the Note and each of the Loan Documents
1.4
Principal Balance. The Borrower acknowledges and agrees that the current outstanding
principal balance of the Note as of the date hereof is $9,500,000.00
1.5
Representations and Warranties. The Borrower hereby represents
and warrants to the Bank that,
| (a) | The person executing this Agreement is duly authorized to do so and to bind the Borrower to the terms hereof; | ||
| (b) | Each of the Loan Documents is a valid and legal binding obligation of the Borrower, enforceable in accordance with its terms, and is not subject to any defenses, counterclaims, or offsets of any kind, | ||
| (c) | All financial statements delivered to the Bank were true, accurate and complete, in all material respects, as of the date of delivery to the Bank; | ||
| (d) | Since the date of the Loan Documents there has been no material adverse change in the condition, financial or otherwise, of the Borrower, except as disclosed to the Bank in writing; | ||
| (e) | There exists no action, suit, proceeding or investigation, at law or in equity, before any court,board, administrative body or other entity, pending or threatened, affecting the Borrower or its property, wherein an unfavorable decision, ruling or finding would materially adversely affect the business operations, property or financial condition of the Borrower; and | ||
| (f) | There exists no event of default, or other circumstance that with the passage of time or giving of notice or both will become an event of default, under any of the Loan Documents |
1.6 Interest, Fees, Costs and Expenses. The Borrower shall, simultaneously with the execution of
this Agreement, pay to the Bank all accrued interest owing on the Loan as of the date of this
Agreement together with all fees, costs and expenses due and owing to the Bank by the Borrower
under the Loan Documents
2. MISCELLANEOUS
2.1 Set-Off. The Borrower hereby grants to the Bank a continuing lien and security
interest in any and all deposits or other sums at any time credited by or due from the Bank or any
Bank Affiliate (as hereinafter defined) to the Borrower and any cash, securities, instruments or
other property of the Borrower in the possession of the Bank or any Bank Affiliate, whether for
safekeeping or otherwise, or in transit to or from the Bank or any Bank Affiliate (regardless of
the reason the Bank or Bank Affiliate had received the same or whether the Bank or any Bank
Affiliate has conditionally released the same) as security for the full and punctual payment and
performance of all of the liabilities and obligations of the Borrower to the Bank or any Bank
Affiliate and such deposits and other sums may be applied or set off against such liabilities and
obligations of the Borrower to the Bank or any Bank Affiliate at any time, whether or not such are
then due, whether or not demand has been made and whether or not other collateral is then
available to the Bank or any Bank Affiliate.
The term “Bank Affiliate” as used in this Note shall mean any “Affiliate” of the Bank or any
lender acting as a participant under any loan arrangement between the
Bank and the Borrower. The
term “Affiliate” shall mean with respect to any person, (a) any person which, directly or
indirectly through one or more intermediaries controls, or is controlled by, or is under common
control with, such person, or (b) any
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person who is a director or officer (i) of such person, (ii) of any subsidiary of such person, or
(iii) any person described in clause (a) above. For purposes of this definition, control of a
person shall mean the power, direct or indirect, (x) to vote 5% or more of the Capital Stock having
ordinary voting power for the election of directors (or comparable equivalent) of such person, or
(y) to direct or cause the direction of the management and policies of such person whether by
contract or otherwise Control may be by ownership, contract, or
otherwise.
2.2 Release of the Bank. The Borrower hereby confirms that as of the date hereof it has
no claim, set-off, counterclaim, defense, or other cause of action against the Bank including, but
not limited to, a defenses of usury, any claim or cause of action at common law, in equity,
statutory or otherwise, in contract or in tort, for fraud, malfeasance, misrepresentation,
financial loss, usury, deceptive trade practice, or any other loss, damage or liability of any
kind, including, without limitation, any claim to exemplary or punitive damages arising out of any
transaction between the Borrower and the Bank. To the extent that any such set-off, counterclaim,
defense, or other cause of action may exist or might hereafter arise based on facts known or
unknown that exist as of this date, such set-off, counterclaim, defense and other cause of action
is hereby expressly and knowingly waived and released by the Borrower. The Borrower acknowledges
that this release is part of the consideration to the Bank for the financial and other
accommodations granted by the Bank in this Agreement.
2.3 Costs and Expenses. The Borrower shall pay to the Bank on demand any and all costs and
expenses (including, without limitation, reasonable attorneys’ fees and disbursements, court
costs, litigation and other expenses) incurred or paid by the Bank in establishing, maintaining,
protecting or enforcing any of the Bank’s rights or any of the obligations owing by the Borrower
to the Bank, including, without limitation, any and all such costs and expenses incurred or paid
by the Bank in defending the Bank’s security interest in, title or right to, the Collateral or in
collecting or attempting to collect or enforcing or attempting to
enforce payment of the Loan.
2.4 Indemnification. The Borrower shall indemnify, defend and hold the Bank and the Bank
Affiliates and their directors, officers, employees, agents and attorneys (each an “Indemnitee”)
harmless against any claim brought or threatened against any Indemnitee by the Borrower or any
guarantor or endorser of the obligations of the Borrower to the Bank, or any other person (as well
as from attorneys’ fees and expenses in connection therewith) on account of the Bank’s relationship
with the Borrower, or any guarantor or endorser of the obligations of the Borrower to the Bank
(each of which may be defended, compromised, settled or pursued by the Bank with counsel of the
Bank’s election, but at the expense of the Borrower), except for any claim arising out of the gross
negligence or willful misconduct of the Bank. The within indemnification shall survive payment of
the obligations of the Borrower to the Bank, and/or any termination, release or discharge executed
by the Bank in favor of the Borrower.
2.5
Severability. If any provision of this Agreement or portion of such provision or the
application thereof to any person or circumstance shall to any extent be held invalid or
unenforceable, the remainder of this Agreement (or the remainder of such provision) and the
application thereof to other persons or circumstances shall not be affected thereby.
2.6
Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which shall constitute but one agreement.
2.7
Complete Agreement. This Agreement and the other Loan Documents constitute the entire
agreement and understanding between and among the parties hereto relating to the subject matter
hereof, and supersedes all prior proposals, negotiations, agreements and understandings among the
parties hereto with respect to such subject matter.
2.8
Binding Effect of Agreement. This Agreement shall be binding upon and inure to the benefit of
the respective heirs, executors, administrators, legal representatives, successors and assigns of
the parties hereto, and shall remain in full force and effect (and the Bank shall be entitled to rely
thereon) until
released in writing by the Bank. The Bank may transfer and assign this Agreement and deliver the
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Collateral to the assignee, who shall thereupon have all of the rights of the Bank; and the Bank
shall then be relieved and discharged of any responsibility or liability with respect to this
Agreement and the Collateral. Except as expressly provided herein or in the other Loan Documents,
nothing, expressed or implied, is intended to confer upon any party, other than the parties hereto,
any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other
Loan Documents
2.9
Further Assurances. The Borrower will from time to time execute and deliver to the Bank
such documents, and take or cause to be taken, all such other further action, as the Bank may
request in order to effect and confirm or vest more securely in the Bank all rights contemplated by
this Agreement (including, without limitation, to correct clerical errors) or to vest more fully in
or assure to the Bank the security interest in the Collateral or to comply with applicable statute
or law and to facilitate the collection of the Collateral (including, without limitation, the
execution of stock transfer orders and stock powers, endorsement of promissory notes and
instruments and notifications to obligors on the Collateral). To the extent permitted by applicable
law, the Borrower authorizes the Bank to file financing statements, continuation statements or
amendments without the Borrower’s signature appearing thereon, and any such financing statements,
continuation statements or amendments may be signed by the Bank on behalf of the Borrower, if
necessary, and may be filed at any time in any jurisdiction. The Bank may at any time and from time
to time file financing statements, continuation statements and amendments thereto which contain any
information required by the Ohio Uniform Commercial Code, Ohio Revised Code Chapter 1309 as amended
from time to time (the “Code”) for the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including whether the Borrower is an organization,
the type of organization and any organization identification number issued to the Borrower. The
Borrower agrees to furnish any such information to the Bank promptly
upon request. In addition, the
Borrower shall at any time and from time to time take such steps as the Bank may reasonably request
for the Bank (i) to obtain an acknowledgment, in form and substance satisfactory to the Bank, of
any bailee having possession of any of the Collateral that the bailee holds such Collateral for the
Bank, (ii) to obtain “control” (as defined in the Code) of any Collateral comprised of deposit
accounts, electronic chattel paper, letter of credit rights or investment property, with any
agreements establishing control to be in form and substance satisfactory to Bank, and (iii)
otherwise to insure the continued perfection and priority of the Bank’s security interest in any of
the Collateral and the preservation of its rights therein. The Borrower hereby constitutes the Bank
its attorney-in-fact to execute, if necessary, and file all filings required or so requested for
the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; and such
power, being coupled with an interest, shall be irrevocable until this Agreement terminates in
accordance with its terms, all obligations of the Borrower to the Bank are irrevocably paid in full
and the Collateral is released
2.10 Amendments and Waivers. This Agreement may be amended and the Borrower may take any
action herein prohibited, or omit to perform any act herein required to be performed by it, if the
Borrower shall obtain the Bank’s prior written consent to each such amendment, action or omission
to act. No delay or omission on the part of the Bank in exercising any right hereunder shall
operate as a waiver of such right or any other right and waiver on any one or more occasions shall
not be construed as a bar to or waiver of any right or remedy of the Bank on any future occasion
2.11
Terms of Agreement. This Agreement shall continue in force and effect so long as any
obligation of the Borrower to Bank shall be outstanding and is supplementary to each and every other agreement
between the Borrower and Bank and shall not be so construed as to limit or otherwise derogate from any
of the rights or remedies of Bank or any of the liabilities, obligations or undertakings of the Borrower
under any such agreement, nor shall any contemporaneous or subsequent agreement between the
Borrower and the Bank be construed to limit or otherwise derogate from any of the rights or remedies of
Bank or any of the liabilities, obligations or undertakings of the Borrower hereunder, unless such other
agreement specifically refers to this Agreement and expressly so provides
2.12
Notices. Any notices under or pursuant to this Agreement shall be deemed duly received and
effective if delivered in hand to any officer of agent of the Borrower or Bank, or if mailed by
registered or
certified mail, return receipt requested, addressed to the Borrower or Bank at the address set
forth in this
Agreement or as any party may from time to time designate by written notice to the other party.
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2.13
Ohio Law. This Agreement has been executed or completed and is to be performed in
Ohio, and it and all transactions thereunder or pursuant thereto shall be governed as to
interpretation, validity, effect, rights, duties and remedies of the parties thereunder and in all
other respects by the laws of Ohio.
2.14
Reproductions. This Agreement and ail documents which have been or may be hereinafter
furnished by Borrower to the Bank may be reproduced by the Bank by any photographic, photostatic,
microfilm, xerographic or similar process, and any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made in the regular course of
business).
2.15
Venue. Borrower irrevocably submits to the nonexclusive jurisdiction of any Federal or
state court sitting in Ohio, over any suit, action or proceeding arising out of or relating to
this Agreement, Borrower irrevocably waives to the fullest extent it may effectively do so under
applicable law, any objection it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding brought in any such court and any claim that the same has been brought
in an inconvenient forum. Borrower irrevocably appoints the Secretary of State of the State of
Ohio as its authorized agent to accept and acknowledge on its behalf any and all process which may
be served in any such suit, action or proceeding, consents to such process being served (i) by
mailing a copy thereof by registered or certified mail, postage prepaid, return receipt requested,
to Borrower’s address shown above or as notified to the Bank and (ii) by serving the same upon
such agent, and agrees that such service shall in every respect be deemed effective service upon
Borrower.
2.16 JURY WAIVER. BORROWER AND BANK EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY,
AND AFTER AN OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL, WAIVE (A) ANY AND ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS AGREEMENT, THE OBLIGATIONS, ALL MATTERS
CONTEMPLATED HEREBY AND DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND (B) AGREE NOT TO SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CAN NOT BE, OR HAS NOT
BEEN WAIVED. THE BORROWER CERTIFIES THAT NEITHER THE BANK NOR ANY OF ITS REPRESENTATIVES, AGENTS
OR COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT IN THE EVENT OF ANY
SUCH PROCEEDING SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.
2.17
Warrant of Attorney. Each of the undersigned authorizes any attorney at law to
appear in any Court of Record in the State of Ohio or in any other state or territory of the
United States after the above indebtedness becomes due, whether by acceleration or otherwise, to
waive the issuing and service of process, and to confess judgment against any one or more of the
undersigned in favor of the Bank for the amount then appearing due together with costs of suit,
and thereupon to waive all error and all rights of appeal and stays of execution. No such judgment
or judgments against less than all of the undersigned shall be a bar to a subsequent judgment or
judgments against any one or more of the undersigned against whom judgment has not been obtained
hereon; this being a joint and several warrant of attorney to confess judgment. The attorney at
law authorized hereby to appear for the undersigned may be an attorney at law representing the
Bank, and the undersigned hereby expressly waive any conflict of interest that may exist by virtue
of such representation. The undersigned also agree that the attorney acting for the undersigned as
set forth in this Section may be compensated by the Bank for such
services.
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WARNING—BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY
ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A
COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
| Xxxx D Oil & Gas Company | ||||||
| By: | /s/ Xxxxxxx X Xxxxxxx | |||||
| Xxxxxxx X Xxxxxxx CEO | ||||||
| By: | /s/ Xxxx Xxxxxxx | |||||
| Xxxx Xxxxxxx, President | ||||||
| By: | /s/ C. Xxxx Xxxxxxxx | |||||
| C. Xxxx Xxxxxxxx CFO | ||||||
| Accepted: RBS Citizens, N.A. d/b/a Charter One | ||||
By:
|
/s/ Xxxxxx Xxxxxx | |||
| Name: Xxxxxx Xxxxxx | ||||
| Title: Vice President | ||||
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