Attached files
EXHIBIT 10.35
LOAN MODIFICATION AGREEMENT
THIS LOAN MODIFICATION AGREEMENT (this Modification) is made and entered into effective as
of December 1, 2009 (the Effective Date), by and among GREAT PLAINS LAND DEVELOPMENT COMPANY,
LTD., an Ohio limited liability company (Borrower), RICHARD M. OSBORNE, individually as
a natural person (RMO), RICHARD M. OSBORNE, TRUSTEE UNDER RESTATED TRUST AGREEMENT OF JANUARY 13,
1995 (Trust) and GREAT PLAINS NATURAL GAS COMPANY, an Ohio corporation (GPNG) (RMO, Trust and
GPNG are each a Guarantor and collectively Guarantors), and CITIZENS BANK (Bank).
RECITALS
A. To evidence certain financing arrangements (the Loan), Borrower executed and delivered to
Bank, among other things, (i) a Credit Agreement dated July 3, 2008, by and between Borrower and
Bank (the Credit Agreement), and (ii) a Term Note dated July 3, 2008, in the original principal
amount of Eight Hundred Ninety-Two Thousand Three Hundred and no/100 Dollars ($892,300.00),
executed by Borrower in favor of Bank (the Term Note).
B. The payment and performance of the indebtedness and obligations under the Loan are secured
by, among other things (i) that certain Security Agreement dated July 3, 2008 executed by Borrower
in favor of Bank (the Security Agreement), (ii) that certain Assignment of Contracts, Licenses,
Permits and Approvals dated July 3, 2008 executed by Borrower in favor of Bank (the Assignment of
Contracts), and (iii) a Guaranty dated July 3, 2008 executed by each Guarantor in favor of Bank
(each a Guaranty and collectively, the Guaranties).
C. The Security Agreement, Assignment of Contracts and the Guaranties, together with all other
agreements, documents and instruments executed by Borrower and Guarantors, or any one of them, for
the benefit of Bank in connection therewith and the transactions contemplated thereby, are
collectively referred to herein as the Security Documents.
D. The Credit Agreement, the Term Note and Security Documents, as modified herein, and as the
same may from time to time heretofore or hereafter be amended, modified, revised, supplemented,
substituted, renewed, extended or restated, are hereinafter collectively referred to as the Loan
Documents.
E. At the request of Borrower and Guarantors, Bank has agreed to modify the Loan to, among
other things, adjust the interest rate on the Term Note, add Energy, Inc., a Montana corporation
(Energy), as a guarantor of the Loan, and adjust certain financial reporting and financial
covenants.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. The aforesaid Recitals are hereby incorporated into this Modification as if fully set forth
in this Paragraph 1.
2. The Credit Agreement is hereby amended as follows:
(a) The definition of Guarantors in Section 1.20 is hereby amended and restated as follows:
1.20 Guarantors mean collectively Richard M. Osborne, individually as a
natural person (RMO), Richard M. Osborne, Trustee under Restated Trust Agreement
of January 13, 1995 (the Trust), Great Plains Natural Gas Company, an Ohio
corporation, and Energy, Inc., a Montana corporation (Energy), jointly and
severally.
(b) The definition of Interest Rate in Section 1.25 is hereby amended and restated as
follows:
1.25 Interest Rate shall mean the Applicable LIBOR Rate (as adjusted from
time to time) PLUS two hundred twenty-five (225) basis points, as adjusted from time
to time as provided herein; provided, however, that commencing on December 1, 2009
and continuing at all time thereafter, said Interest Rate shall be increased to the
Applicable LIBOR Rate (as adjusted from time to time) PLUS four hundred (400) basis
points, as adjusted from time to time as provided herein; provided, however, that in
no event shall the Interest Rate with respect to the Term Note be less than Five
Percent (5%) per annum at any time on and after December 1, 2009.
(c) The definition of Tangible Net Worth in Section 1.43 is hereby amended and restated as
follows:
1.43 Net Worth means a total of the capital stock (less treasury stock),
paid-in capital surplus, general contingency reserves, retained earnings (deficit)
of Borrower and any Subsidiary of Borrower as determined on a consolidated basis in
accordance with generally accepted accounting principles consistently applied, after
eliminating all inter-company items and all amounts properly attributable to
minority interests, if any, in the stock and surplus of any Subsidiary,
minus the following items (without duplication of deductions) if any,
appearing on the consolidated balance sheet of Borrower
(d) Section 4.3(c) is hereby amended and restated in its entirety to read as follows:
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(c) Annually as set forth in RMOs Guaranty, a copy of RMOs personal
financial statement, certified by such Guarantor, in such form and substance as Bank
may reasonably require, and a copy of RMOs federal income tax return
together with all schedules and corresponding K-1s and any applicable extensions
thereof.
(e) Section 4.3 is hereby amended by adding a new subsection (l) thereto which shall read as
follows:
(l) Annually as set forth in Energys Guaranty, a copy of Energys Form 10-K,
certified by such Guarantor; and quarterly as set forth in Energys Guaranty, a copy
of Energys Form 10-Q, certified by such Guarantor.
(f) Section 5.16 is hereby amended and restated in its entirety to read as follows:
5.16 Minimum Net Worth. Borrower shall not permit its Net Worth, on a
consolidated basis, to be less than One Million Eight Hundred Fifteen Thousand and
no/100 Dollars ($1,815,000.00) plus 100% of Net Income less the pro-rata share of
the Energy dividend (the Initial Net Worth Amount), as of December 31, 2009, as
calculated by Bank in its reasonable discretion. Thereafter, Borrower shall not
permit its Net Worth, on a consolidated basis, to be less than the Initial Net Worth
Amount as positively increased by the Increase Amount as of the end of each fiscal
quarter and fiscal year, with the first Increase Amount determined as of March 31,
2010 and as of the end of each fiscal quarter and fiscal year thereafter. The
minimum Net Worth covenant as required herein shall be tested as of the end of each
fiscal quarter and fiscal year beginning as of December 31, 2009 and continuing as
of the end of each fiscal quarter and fiscal year thereafter, all as calculated by
Bank in its reasonable discretion. As used herein, Increase Amount shall mean an
amount equal to one hundred percent (100%) of net earnings before distributions less
the pro-rata share of the Energy dividend, as calculated by Bank in its reasonable
discretion. There will be no deduction for losses.
(g) Notwithstanding any provision to the contrary contained in Section 5 of the Credit
Agreement, the change in the ownership of the capital stock of Borrower whereby Energy acquires all
of the capital stock of Borrower from Borrowers current shareholders is hereby approved by Bank on
a one-time basis only and the same shall not constitute an Event of Default thereunder.
(h) Notwithstanding the Events of Default set forth in Section 6.1 of the Credit Agreement, it
shall not constitute an Event of Default if any of the conditions set forth in Section 6.1 of the
Credit Agreement shall exist with respect to RMO and/or the Trust; provided, however,
nothing herein contained shall in any way limit or modify the Guaranty dated July 3, 2008 executed
by each of RMO and the Trust in favor of Bank.
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(i) The Credit Agreement referred to in the Loan Documents shall be the Credit Agreement as
amended hereby. All references in this Modification to the Credit Agreement shall be deemed to
include the Credit Agreement as amended herein. The Term Loan Maturity and the Term Loan Maturity
Date (as said terms are defined in the Credit Agreement) are confirmed to be July 2, 2013.
3. The Term Note is hereby amended to reflect the changes made in the Credit Agreement
provided herein. The Term Note referred to in the Loan Documents shall be the Term Note as amended
hereby. All references in this Modification to the Term Note shall be deemed to include the Term
Note as amended herein.
4. The other Loan Documents not hereinabove amended are hereby amended to reflect the changes
reflected in this Modification, the amended Credit Agreement and the amended Term Note. All
references in this Modification to the other Loan Documents shall be deemed to be to the other Loan
Documents as amended hereby.
5. Borrower reaffirms and agrees that all covenants, agreements, stipulations,
representations, warranties and conditions in the Loan Documents shall be and remain in full force
and effect, except as amended by this Modification. Borrower reaffirms and agrees that none of the
obligations or liabilities of Borrower under the Loan Documents as amended by this Modification
shall be diminished or released by any provisions by this Modification, nor shall this Modification
in any way impair, diminish or affect any of the Banks rights under the Loan Documents, whether
such rights or remedies arise thereunder or by operation of law.
6. Each Guarantor reaffirms and agrees that all covenants, agreements, stipulations,
representations, warranties and conditions in the Loan Documents shall be and remain in full force
and effect, except as amended by this Modification. Each Guarantor reaffirms and agrees that none
of the obligations or liabilities of such Guarantor under the Loan Documents as amended by this
Modification shall be diminished or released by any provisions by this Modification, nor shall this
Modification in any way impair, diminish or affect any of the Banks rights under the Loan
Documents, whether such rights or remedies arise thereunder or by operation of law.
7. Nothing contained herein shall vitiate or discharge Borrowers or any Guarantors liability
under any of the Loan Documents. Borrower covenants and agrees that it shall pay the Term Note, as
amended hereby, together with all interest thereon, and perform all obligations of Borrower under
the Loan Documents. Borrower hereby reaffirms and agrees that the Term Note and the other Loan
Documents, as amended hereby, are valid, binding and in full force and effect. Each Guarantor
covenants and agrees to perform such Guarantors obligations under the Guaranty and any other Loan
Documents to which such Guarantor is a party. Each Guarantor hereby reaffirms and agrees that such
Guarantors Guaranty and the other Loan Documents, as amended hereby, are valid, binding and in
full force and effect.
8. Borrower and Guarantors hereby each acknowledges and agrees that: (i) as of the date of
this Modification, there are no offsets, defenses or counterclaims against Bank arising out of or
in any way relating to any of the Loan Documents, (ii) each releases and forever discharges
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Bank, its agents, servants, employees, directors, officers, attorneys, branches, affiliates,
subsidiaries, successors and assigns and all persons, firms, corporations and organizations acting
or who have acted in its behalf of and from all damage, loss, claims, demands, liabilities,
obligations, actions and causes of action whatsoever which each may now have or claim to have
against Bank or any of the other persons or entities described in this clause (ii) whether
presently known or unknown, and of every nature and extent whatsoever on account of or in any way
touching, concerning, arising out of or founded upon any of the Loan Documents, and (iii) Bank is
not in default under any of the Loan Documents.
9. Borrower and Guarantors hereby each acknowledges and agrees that: (i) there are no other
agreements or representations, either oral or written, express or implied, relating to the
modification to the Loan Documents except as set forth herein; (ii) this Modification represents a
complete integration of all prior and contemporaneous agreements and understandings of Bank,
Borrower and Guarantors relating to the matters set forth herein, and (iii) all such agreements,
understandings, and documents relating to the modification of the Term Note as set forth herein are
hereby superseded by this Modification.
10. Borrower hereby reaffirms the confession of judgment provisions in the Term Note as
follows:
Borrower hereby irrevocably 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 Note becomes due, whether by lapse of time, acceleration of Maturity or
otherwise, waive the issuance and service of process, admit the Maturity of the Note
and confess judgment against the Borrower in favor of any holder of the Note for the
amount then appearing due, together with interest thereon and costs of suit, and
thereupon to release all errors and waive all rights of appeal and stay of
execution. Borrower expressly (a) waives a conflict of interest as to any attorney
retained by Bank to confess judgment against the Borrower upon the Note, and (b)
consents to the attorney retained by Bank receiving a legal fee from Bank for legal
services rendered for confessing judgment against the Borrower, upon the Note. A
copy of the Note, certified by Bank, may be filed in each such proceeding in place
of filing the original as a warrant of attorney. The authority and power to appear
for and enter judgment against the Borrower, additional exercises thereof or any
imperfect exercise thereof, shall not be extinguished by any judgment entered
pursuant thereto. This warrant of attorney to confess judgment shall remain in full
force and effect so long as any portion of the indebtedness evidenced hereby remains
unpaid, and any confession of judgment and subsequent vacation thereof shall not
constitute termination of this warrant of attorney to confess judgment.
11. Each Guarantor hereby reaffirms the confession of judgment provisions in such Guarantors
Guaranty as follows:
Guarantor hereby 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
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obligations of Guarantor become due, whether by lapse of time, acceleration of
maturity or otherwise, waive the issuance and service of process, admit the maturity
of the obligations of Guarantor, confess judgment against Guarantor in favor of any
holder of the Guaranty for the amount then appearing due, together with interest
thereon and costs of suit, and thereupon to release all errors and waive all rights
of appeal and stay of execution. Guarantor expressly (a) waives a conflict of
interest as to any attorney retained by Bank to confess judgment against Guarantor
upon the Guaranty, and (b) consents to the attorney retained by Bank receiving a
legal fee from Bank for legal services rendered for confessing judgment against
Guarantor, upon the Guaranty. A copy of the Guaranty, certified by Bank, may be
filed in each such proceeding in place of filing the original as a warrant of
attorney. The authority and power to appear for and enter judgment against
Guarantor, additional exercises thereof or any imperfect exercise thereof, shall not
be extinguished by any judgment entered pursuant thereto.
12. Borrower acknowledges and agrees that Banks liens on the collateral for the Loan pursuant
to the Security Documents or otherwise continue to be valid, binding and enforceable first liens
and security interests which secure the obligations under the Loan Documents.
13. Concurrently with the execution of this Modification, Borrower hereby covenants and agrees
to pay to Bank a note fee in the amount of Zero and no/100 Dollars ($0.00) in connection with this
Modification (the Loan Fee), which fee shall be deemed earned as of the date hereof and
nonrefundable, plus all out-of-pocket expenses with respect to this Modification and the
transactions contemplated hereby including, but not limited to, attorneys fees.
14. Borrower and Guarantors each hereby further covenants and agrees to execute any and all
other documents required by Bank to reflect the modification of the Credit Agreement, the Term Note
and the other Loan Documents as provided herein.
15. This Modification shall be governed by, and construed in accordance with, the laws of the
State of Ohio. This Modification may be executed in counterparts, all of which, when taken
together, shall constitute a single instrument. The words hereof, herein, and hereunder, and
other words of a similar import refer to this Modification as a whole and not to the individual
paragraphs in which such terms are used. References to paragraphs and other subdivisions of this
Modification are to the designated paragraphs and other subparagraphs of this Modification as
originally executed. The headings of this Modification are for convenience only and shall not
define or limit the provisions hereof. Where the context so requires, words used in the singular
shall include the plural and vice versa, and words of one gender shall include all other genders.
This Modification shall be binding upon and inure to the sole benefit of Borrower, Guarantors and
Bank, and their respective heirs, executors, administrators, successors and assigns. Nothing
contained herein shall create, or be construed to create, any right in any person not a party to
this Modification.
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16. As conditions precedent to Banks acceptance of this Modification, the following items
shall be required (all of which shall be in such form and substance as Bank shall require) and
shall be executed, where applicable, and delivered to Bank, or otherwise satisfied, as applicable:
(a) | Payment of the Loan Fee and Banks out-of-pocket costs with respect to this Modification including, but not limited to, attorneys fees; | ||
(b) | Receipt, review and approval of all financial information that Bank may deem necessary regarding Borrower and/or Guarantors; | ||
(c) | There shall exist no condition or event constituting an Event of Default as defined in the Loan Documents or which after notice or lapse of time or both would constitute such an Event of Default thereunder; | ||
(d) | Subject to Paragraph 19 hereof, a Guaranty executed and delivered by Energy in favor of Bank in such form and substance as Bank shall require (the Energy Guaranty) and a copy of Energys authorizing resolutions and incumbency certificate, in such form and substance as Bank shall require (the Related Energy Documents); and | ||
(e) | Any and all documentation and information that Bank may deem necessary in order to effectuate this Modification and the transactions contemplated hereby, including, but not limited to, authorizing resolutions of Borrower, and all Guarantors who are not natural persons, and all documentation relating to or executed in connection with the acquisition of the capital stock of Borrower by Energy. |
17. BORROWER AND GUARANTORS HEREBY, AND BANK BY ITS ACCEPTANCE HEREOF, EACH WAIVES THE RIGHT
OF A JURY TRIAL IN EACH AND EVERY ACTION ON THIS MODIFICATION OR ANY OF THE OTHER LOAN DOCUMENTS,
IT BEING ACKNOWLEDGED AND AGREED THAT ANY ISSUES OF FACT IN ANY SUCH ACTION ARE MORE APPROPRIATELY
DETERMINED BY THE COURTS. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY BORROWER
AND GUARANTORS AND BORROWER AND GUARANTORS EACH ACKNOWLEDGES THAT NO ONE HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY
ITS EFFECT. THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY BANKS ABILITY
TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED IN THE
TERM NOTE OR ANY OF THE OTHER LOAN DOCUMENTS. FURTHER, BORROWER AND GUARANTORS EACH HEREBY CONSENTS
AND SUBJECTS BORROWER AND GUARANTORS, AS APPLICABLE, TO THE JURISDICTION OF COURTS OF THE STATE OF
OHIO AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, TO THE VENUE OF SUCH COURTS IN ANY
COUNTY IN WHICH BANK IS LOCATED.
18. Bank hereby waives on a one-time basis only, utilizing its sole and absolute discretion in
the matter, the Event of Default (as said term is defined in the Credit Agreement) arising under
Section 6.1 of the Credit Agreement resulting from judgments rendered against
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RMO and the Trust by RBS Citizens, National Association (dba Charter One) and Fifth Third Bank.
19. Notwithstanding any provision to the contrary contained in this Modification, Banks
acceptance of this Modification and the effectiveness hereof is expressly subject to the
satisfaction of the following condition subsequent, time being of the essence: The original,
fully-executed Energy Guaranty is delivered to Bank on or before January 5, 2010. In the event that
said condition subsequent is not satisfied as aforesaid, except for the next sentence of this
Paragraph 19, this Modification and all of its terms, covenants and conditions shall become null
and void ab initio and shall be of no force or effect. In such event, Borrower and
Guarantors acknowledge, covenant and agree that the Loan will be in default and that Bank reserves
the right to exercise all rights and remedies available to it pursuant to the Loan Documents and in
accordance with all applicable laws in connection with such default.
[Remainder of this page intentionally left blank]
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20. Except as expressly amended hereby, the terms and conditions of the Loan Documents are
hereby confirmed, remain unchanged and are in full force and effect. In the event of an
inconsistency between this Modification and the Term Note or the other Loan Documents, the terms
herein shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Loan Modification Agreement to be
executed and delivered in the State of Ohio as of the 31st day of December, 2009, but the parties
agree that this Loan Modification Agreement shall be effective as of the Effective Date.
WARNINGBY 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.
GREAT PLAINS LAND DEVELOPMENT COMPANY, LTD., an Ohio limited liability company |
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By: | /s/ Thomas M. Smith | |||
Thomas J. Smith, | ||||
Vice President |
BORROWER
[Signatures Continued on Next Page]
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WARNINGBY 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.
/s/ Richard M. Osborne | ||||
RICHARD M. OSBORNE, Individually |
GUARANTOR
WARNINGBY 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.
/s/ Richard M. Osborne | ||||
RICHARD M. OSBORNE, TRUSTEE | ||||
UNDER RESTATED TRUST AGREEMENT OF JANUARY 13, 1995 |
GUARANTOR
[Signatures Continued on Next Page]
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WARNINGBY 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.
GREAT PLAINS NATURAL GAS
COMPANY, an Ohio corporation |
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By: | /s/ Thomas J. Smith | |||
Thomas J. Smith, | ||||
Vice President |
GUARANTOR
Accepted: CITIZENS BANK |
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By: | /s/ David Tholt | |||
Name: | David Tholt | |||
Title: | Vice-President |
BANK
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