EXHIBIT 10.1
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EXTENSION AGREEMENT
     This EXTENSION AGREEMENT entered into at Providence, Rhode Island, as of
February 26, 2008, between John D Oil & Gas Company, an Ohio corporation, with
an address of 8500 Station Street, Suite 345, Mentor, Ohio 44060 (the
“Borrower”) and RBS Citizens, N. A. d/b/a Charter One, a national banking
association with an address of One Citizens Plaza, Providence, Rhode Island
02903 (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

 

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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.

                  John D Oil & Gas Company    
 
           
 
  By:   /s/ Richard M Osborne    
 
           
 
      Richard M Osborne CEO    
 
           
 
  By:   /s/ Greg Osborne    
 
           
 
      Greg Osborne, President    
 
           
 
  By:   /s/ C. Jean Mihitsch    
 
           
 
      C. Jean Mihitsch CFO    

          Accepted: RBS Citizens, N.A. d/b/a Charter One  
 
       
By:
  /s/ Robert Dracon    
 
        Name: Robert Dracon     Title: Vice President    

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