Document:

exv10w3

Exhibit 10.3

Execution Copy

SECOND AMENDMENT TO FORBEARANCE AND AMENDMENT AGREEMENT

     This SECOND AMENDMENT TO FORBEARANCE AND AMENDMENT AGREEMENT (the “Amendment”) is made
as of October 2, 2009, by and among THE MERIDIAN RESOURCE CORPORATION, a Texas corporation (the
“Borrower”), the undersigned Guarantors (the “Guarantors”), the several banks,
financial institutions and other entities from time to time parties to the Credit Agreement (as
defined below) (collectively, the “Lenders”), and FORTIS CAPITAL CORP. (“Fortis” or
the “Administrative Agent”), as administrative agent for the Lenders.

RECITALS:

     WHEREAS, the Borrower, Fortis as Administrative Agent, and the Lenders have entered into an
Amended and Restated Credit Agreement dated as of December 23, 2004, as amended by that certain
First Amendment to Credit Agreement dated as of February 25, 2008, further amended by that certain
Second Amendment to Credit Agreement dated as of December 19, 2008, and further amended by the
Forbearance Agreement (defined below) (as so amended, the “Credit Agreement”);

     WHEREAS, the Borrower, the Guarantors, Fortis as Administrative Agent, and the Lenders have
entered into that certain Forbearance and Amendment Agreement dated as of September 3, 2009 (the
“Forbearance Agreement”);

     WHEREAS, the Borrower has requested that the Administrative Agent and Lenders extend the time
for performance by the Borrower of certain conditions subsequent required under the Forbearance
Agreement and the Administrative Agent and Lenders have agreed to do so under the terms and
conditions set forth in this Amendment.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, each of the Administrative Agent, the
Lenders, the Borrower and the Guarantors agree as follows:

     1. Definitions. Capitalized terms defined in the Recitals section of this Amendment
are incorporated herein by this reference and are used herein as so defined. Capitalized terms
used and not defined in this Amendment (including in the Recitals section of this Amendment) shall
have the meanings assigned to such terms in the Forbearance Agreement and the Credit Agreement.

     2. Amendment to the Forbearance Agreement. The Borrower, the Guarantors,
Administrative Agent and the Lenders agree that the Forbearance Agreement will be amended as
follows:

     (a) Conditions Subsequent. Section 10(a) of the Forbearance Agreement
is amended to replace the date “October 2, 2009” contained therein with the date “October
7, 2009”.

2nd
Amendment to Forbearance Agreement [Meridian]

1

 

     3. Ratifications, Representations and Warranties.

     (a) Ratification of Loan Documents and Liens. Except as expressly modified and
superseded by this Amendment, the terms and provisions of the Loan Documents are ratified and
confirmed and shall continue in full force and effect. Each Credit Party, the Administrative Agent
and Lenders agree that the Loan Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms. Each Credit Party further expressly
acknowledges and agrees that the Lenders have a valid, non-avoidable, enforceable and perfected
security interest in and lien against each item of collateral described in the Security Documents,
and that such security interest and lien secures the payment Obligations and the performance of all
other obligations of the Borrower under the Loan Documents.

     (b) General Representations and Warranties. Each Credit Party hereby jointly and
severally represents and warrants to the Administrative Agent and Lenders that (i) the execution,
delivery and performance of this Amendment has been duly authorized by all requisite organizational
action on the part of such Credit Party and will not violate the constituent organizational
documents of such Credit Party, contravene any contractual restriction, any law, rule or regulation
or court or administrative decree or order binding on or affecting such Credit Party or result in,
or require the creation or imposition of any lien, security interest or encumbrance on any of the
properties of such Credit Party; (ii) this Amendment has been duly executed and delivered by each
Credit Party and is the legal, valid and binding obligation of each Credit Party, enforceable in
accordance with its terms; (iii) subject to the existence of the Designated Events of Default, the
representations and warranties contained in the Credit Agreement and any Loan Document
are true and correct on and as of the date hereof and on and as of the date of execution hereof as
though made on and as of each such date; (iv) except for the Designated Events of Default, no
Default or Event of Default under the Credit Agreement has occurred and is continuing; (v) except
for the Designated Events of Default, such Credit Party is in full compliance with all covenants
and agreements contained in the Loan Documents; and (vi) absent the effectiveness of
this Amendment, the Administrative Agent and Lenders are entitled to exercise immediately their
respective rights and remedies under the Loan Documents, including, but not limited to, the right
to accelerate the maturity of the Obligations and enforce their rights and remedies under the
Security Documents.

     (c) Ratification of Guarantees. Each of the Guarantors hereby acknowledges and
consents to all of the terms and conditions of this Amendment and hereby ratifies and confirms its
respective guarantee under the Guarantee dated as of December 23, 2004 (the “Guarantee”)
for the benefit of the Administrative Agent and Lenders. Each Guarantor hereby represents and
acknowledges that the execution and delivery of this Amendment shall in no way change or modify its
obligations as a guarantor under the Guarantee and shall not constitute a waiver by either the
Administrative Agent or Lenders of any of either the Administrative Agent’s or Lenders’ rights
against such Guarantor.

2

 

     4. Conditions Precedent. This Amendment shall become effective (the “Effective
Date”) upon receipt by the Administrative Agent of a copy of this Amendment executed by the
Required Lenders.

     5. Miscellaneous Provisions.

     (a) Survival of Representations and Warranties. All representations and
warranties made in any Loan Document shall survive the execution and delivery of this
Amendment, and no investigation by the Administrative Agent or Lenders or any closing shall
affect the representations and warranties or the right of the Administrative Agent or
Lenders to rely upon them.

     (b) Limitation on Relationship between Parties. The relationship of the
Administrative Agent and Lenders, on the one hand, and the Credit Parties, on the other
hand, has been and shall continue to be, at all times, that of creditor and debtor. Nothing
contained in this Amendment, any instrument, document or agreement delivered in connection
therewith or in the Loan Documents shall be deemed or construed to create a fiduciary
relationship between the parties.

     (c) Expenses of the Administrative Agent or Lenders. The Borrower agrees to
pay on demand all reasonable costs and out-of-pocket expenses incurred by the Administrative
Agent and Lenders in connection with the preparation, negotiation, execution and
enforcement of this Amendment and any and all amendments, modifications, and
supplements thereto, including, without limitation, the reasonable costs and fees of the
Administrative Agent’s and Lenders’ legal counsel, and all costs and expenses incurred by
the Administrative Agent and Lenders in connection with the enforcement or preservation of
any rights under any Loan Document.

     (d) Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the
remainder of this Amendment and the effect thereof shall be confined to the provision so
held to be invalid or unenforceable.

     (e) Successors and Assigns; Third Party Beneficiaries. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns, except that no Credit Party may assign or transfer any of its rights or
obligations under this Amendment without the prior written consent of the
Administrative Agent, and no other Person shall have any right, benefit or interest under or
because of the existence of this Amendment.

     (f) Amendments; Interpretation. No amendment or modification of any
provision of this Amendment shall be effective without the written agreement of each Credit
Party and the Required Lenders, and no waiver of any provision of this Amendment or
consent to any departure by any Credit Party therefrom, shall in any event be effective
without the written concurrence of the Required Lenders. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which it was given.

3

 

     (g) Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same instrument, and all signature pages transmitted by
electronic transmission shall be considered as original executed counterparts. Each
party to this Amendment agrees that it will be bound by its own facsimile or electronic
signature and that it accepts the facsimile or electronic signatures of each other
party.

     (h)Headings. The headings, captions, and arrangements used in this Amendment are for
convenience only and shall not affect the interpretation of this Amendment.

     (i) Further Assurances. Each Credit Party agrees to execute such other and further
documents and instruments as the Administrative Agent may request to implement the provisions of
this Amendment and to perfect and protect the liens and security interests created by the Credit
Agreement and the other Loan Documents.

     (j) Applicable Law. THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS.

     (k) Release. EACH CREDIT PARTY HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
RECOUPMENT, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL, OR ANY PART OF ITS LIABILITY TO REPAY
THE ANY OBLIGATIONS ARISING UNDER THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE ADMINISTRATIVE AGENT OR LENDERS (OR
ANY OF THEM). EACH CREDIT PARTY HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES
THE ADMINISTRATIVE AGENT AND LENDERS, THEIR RESPECTIVE PREDECESSORS, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS, ACCOUNTANTS, CONSULTANTS,
REPRESENTATIVES, OWNERS, AFFILIATES, SUCCESSORS,
TRANSFEREES AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”). FROM ALL POSSIBLE CLAIMS,
DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AMENDMENT IS EXECUTED, WHICH SUCH CREDIT PARTY MAY NOW OR HEREAFTER HAVE AGAINST ANY RELEASED
PARTY, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM OR ARISING IN CONNECTION WITH ANY “LOANS”,
INCLUDING,

4

 

WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING
INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES
UNDER THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND/OR NEGOTIATION OF, OR EXECUTION OF, THIS
AMENDMENT. IT IS AGREED THAT THE SCOPE OF THIS RELEASE UNDER THIS PARAGRAPH SHALL INCLUDE ALL
CLAIMS. DEMANDS OR CAUSES OF ACTION ARISING IN WHOLE OR PART FROM THE NEGLIGENCE OR STRICT LIABLITY
OF THE ADMINISTRATIVE AGENT. ANY LENDER OR ANY OTHER RELEASED PARTY. EACH CREDIT PARTY HEREBY
COVENANTS AND AGREES NEVER TO INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY, NOR INSTITUTE,
PROSECUTE, OR IN ANY WAY AID IN THE INSTITUTION OR PROSECUTION OF, ANY CLAIM, ACTION OR CAUSE OF
ACTION, RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY NATURE AGAINST ANY OF THE RELEASED PARTIES
ARISING OUT OF OR RELATED TO A RELEASED PARTY’S ACTIONS, OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS
IN ADMINISTERING, ENFORCING, MONITORING, COLLECTING OR ATTEMPTING TO COLLECT, THE OBLIGATIONS,
INDEBTEDNESS AND OTHER OBLIGATIONS OF A CREDIT PARTY TO A RELEASED PARTY. EACH CREDIT PARTY AGREES
TO INDEMNIFY AND HOLD THE ADMINISTRATIVE AGENT AND EACH LENDER HARMLESS FROM ANY AND ALL MATTERS
RELEASED PURSUANT TO THIS PARAGRAPH. EACH CREDIT PARTY ACKNOWLEDGES THAT THE AGREEMENTS IN THIS
PARAGRAPH ARE INTENDED TO BE IN FULL SATISFACTION OF ALL OR ANY ALLEGED INJURIES OR DAMAGES TO EACH
CREDIT PARTY, ITS SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS, ASSIGNS AND PERSONAL AND
LEGAL REPRESENTATIVES ARISING IN CONNECTION WITH SUCH MATTERS RELEASED PURSUANT TO THE OTHER
PROVISIONS OF THIS PARAGRAPH. EACH CREDIT PARTY REPRESENTS AND WARRANTS TO LENDER THAT IT HAS NOT
PURPORTED TO TRANSFER, ASSIGN OR OTHERWISE CONVEY ANY RIGHT, TITLE OR INTEREST OF A CREDIT PARTY IN
ANY RELEASED MATTER TO ANY OTHER PERSON AND THAT THE FOREGOING CONSTITUTES A FULL AND COMPLETE
RELEASE OF EACH CREDIT PARTY’S CLAIMS WITH RESPECT TO ALL SUCH MATTERS. THE PROVISIONS OF THIS
SECTION 5(k) AND THE REPRESENTATIONS, WARRANTIES, RELEASES, WAIVERS, REMISES, ACQUITTANCES,
DISCHARGES, COVENANTS, AGREEMENTS AND INDEMNIFICATIONS CONTAINED HEREIN (A) CONSTITUTE A MATERIAL
CONSIDERATION FOR AND INDUCEMENT TO THE ADMINISTRATIVE AGENT AND LENDERS ENTERING INTO THIS
AMENDMENT, (B) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY DUTY, OBLIGATION OR
LIABILITY OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO A CREDIT PARTY OR ANY OTHER PERSON, (C) DO
NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY

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LIABILITY, WRONGDOING, OR VIOLATION OF ANY OBLIGATION, DUTY OR AGREEMENT OF THE ADMINISTRATIVE
AGENT OR A LENDER TO A CREDIT PARTY OR ANY OTHER PERSON, AND (D) SHALL NOT BE USED AS EVIDENCE
AGAINST THE ADMINISTRATIVE AGENT OR A LENDER BY A CREDIT PARTY OR ANY OTHER PERSON FOR ANY PURPOSE.

     (1) Waiver of Jury Trial. EACH OF THE PARTIES HERETO KNOWINGLY AND VOLUNTARILY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN THE ADMINISTRATIVE AGENT AND LENDERS AND ANY CREDIT PARTY OR ANY OF THEIR
RESPECTIVE AFFILIATES ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN THIS AMENDMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

     (m) Submission to Jurisdiction. Each Credit Party agrees that all disputes among them
and the Administrative Agent or any Lender arising out of, connected with, related to, or
incidental to the relationship established between them in this Amendment, whether arising in
contract, tort, equity, or otherwise, shall be resolved only by the courts of the State of Texas,
the federal courts sitting therein, and appellate court from any thereof. Each Credit Party waives
in all disputes any objection that any of them may have to the location of the court considering
the dispute which court shall have been chosen in accordance with the foregoing.

     (n) Loan Documents. This Amendment shall constitute a Loan Document.

     (o) Final Agreement. THE CREDIT AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE ENTIRE
EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS
EXECUTED. THE CREDIT AGREEMENT AND THE LOAN DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY
PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY EACH CREDIT
PARTY, THE ADMINISTRATIVE AGENT AND LENDERS.

[Signature Pages Follow]

6

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the day and year first written above.

	 	 	 	 	 
	 	THE CREDIT PARTIES

BORROWER:

THE MERIDIAN RESOURCE CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President — Finance 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	GUARANTORS:

CAIRN ENERGY USA, INC.

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE MERIDIAN RESOURCE & EXPLORATION LLC

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE MERIDIAN PRODUCTION CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE MERIDIAN RESOURCE CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	FBB ANADARKO CORP.

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	TE TMR CORP.

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	SUNDANCE ACQUISITION CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	LOUISIANA ONSHORE PROPERTIES LLC

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	TMR DRILLING CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	TMR EQUIPMENT CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:

FORTIS CAPITAL CORP.,

as Administrative Agent, Co-Lead Arranger, Bookrunner, 

Issuing Lender, and a Lender

 	 
	 	By:  	/s/ Harry T. Nullet
 	 
	 	 	Name:  	Harry T. Nullet 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                                      /s/ Courouble
 	 
	 	 	Name:  	Courouble 	 
	 	 	Title:  	CRO 	 
	 

 

 

	 	 	 	 	 
	 	THE LENDERS:

THE BANK OF NOVA SCOTIA,

as Co-Lead Arranger, Syndication Agent, and a Lender

 	 
	 	By:  	/s/ Keith Buchanan
 	 
	 	 	Name:  	Keith Buchanan 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	COMERICA BANK, 

as a Lender

 	 
	 	By:  	/s/ Matt Turner
 	 
	 	 	Name:  	Matt Turner 	 
	 	 	Title:  	Corporate Banking Officer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, 

as a Lender

 	 
	 	By:  	/s/ Justin Alexander
 	 
	 	 	Name:  	Justin Alexander 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	ALLIED IRISH BANKS plc, 

as a Lender

 	 
	 	By:  	/s/ Mark Connelly
 	 
	 	 	Name:  	Mark Connelly  	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	 	 
	 	By:  	/s/ James Giordano
 	 
	 	 	Name:  	James Giordano 	 
	 	 	Title:  	Assistant Vice Presidentexv4w1

Exhibit 4.1

NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS. THEY HAVE
BEEN ACQUIRED SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE
EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF
COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES LAWS, OR (iii) RECEIPT OF A NO-ACTION LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT
REQUIRED.

Date: September 3, 2009

COMMON STOCK WARRANT

OF

PVF CAPITAL CORP.

INCORPORATED UNDER THE LAWS OF THE STATE OF OHIO

THIS CERTIFIES THAT, for value received, ALESCO PREFERRED FUNDING IV, LTD. (the “Investor”) is
entitled to subscribe for and purchase shares (the “Shares”) of the fully paid and nonassessable
Common Stock of PVF CAPITAL CORP., an Ohio corporation (the “Company”), subject to the provisions
and upon the terms and conditions hereinafter set forth. As used herein, the term “Common Stock”
shall mean the Company’s duly authorized Common Stock, and any stock into or for which such Common
Stock may hereafter be exchanged pursuant to the Articles of Incorporation of the Company as from
time to time amended as provided by law and in such Articles, and the term “Grant Date” shall mean
the date set forth above.

This Warrant is issued in connection with the Exchange Agreement of even date herewith executed by
and among the Investor, Cohen & Company Financial Management, LLC, and the Company (the “Exchange
Agreement”).

	 	1.	 	TERM. Subject to the terms hereof, the purchase right represented by this
Warrant is exercisable, in whole, at any time from and after the Grant Date and at or
prior to 11:59 p.m. Eastern Standard Time on the date two (2) years following the Grant
Date (the “Expiration Date”). The number of Shares, type of security and Exercise Price
(as that term is defined in Section 2 hereof) are subject to adjustment as provided
herein, and all references to “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments. Terms used

 

 

	 	 	 	herein and not otherwise defined shall have the meaning as set forth in the Exchange
Agreement.
	 
	 	2.	 	NUMBER OF SHARES. Subject to the terms and conditions hereinafter set forth,
the Investor is entitled, upon surrender of this Warrant prior to the Expiration Date, to
purchase from the Company, the lesser of (i) 769,608 shares of the Company’s common stock
or (ii) the maximum number of shares of the Company’s common stock then issued and
outstanding such that the Investor, upon its exercise of this Warrant, shall own 9.9% of
the Company’s common stock then issued and outstanding; provided, however, that the
maximum number of shares that can be purchased shall not exceed 769,608 shares, and
provided further that in the event the Investor receives comfort from the Office of Thrift
Supervision (“OTS”) that allows it to rebut the presumption that its holdings of the
Company’s common stock constitute control of the Company for the purpose of the applicable
OTS regulations, clause (ii) shall have no effect. The purchase price for the shares of
the Company’s common stock purchased pursuant to this Warrant shall be equal to the lesser
of: (i) $4.00 per share; (ii) in the event that the Company consummates a public offering,
other than pursuant to an employee benefit plan of the Company, after the date hereof and
prior to the Expiration Date, the public offering price for shares of the Company’s common
stock in such offering or in the event that the Company consummates a private placement of
            shares of its common stock in exchange exclusively for cash consideration pursuant to
Regulation D after the date hereof and prior to the Expiration Date, the Regulation D
private placement offering price for shares of the Company’s common stock; or (iii) the
Conversion Price (as defined below) (“Exercise Price”). The “Conversion Price” shall be
equal to the price, if any, utilized in the Capital II Agreement (as defined below) to
determine the number of shares of the common stock of the Company to be exchanged for
capital securities of PVF Capital Trust II exclusive of any warrants, warrant shares or
warrant prices. The “Capital II Agreement” shall be the written agreement, if any,
executed by the Company within one (1) year of the Grant Date, in regard to the Company’s
purchase of capital securities of PVF Capital Trust II, which provides for the exchange of
the Company’s shares of common stock for capital securities of PVF Capital Trust II. In
the event that no such agreement and/or a conversion price pursuant to such an agreement
are respectively entered into or agreed to, then there shall be no “Conversion Price”.
	 
	 	3.	 	METHOD OF EXERCISE. The purchase right represented by this Warrant may be
exercised by the Investor, in whole, by the surrender of this Warrant (with the notice of
exercise form attached hereto as Exhibit A duly executed) at the principal office
of the Company accompanied by payment to the Company, by certified check, or wire transfer
payable to the Company, in an amount equal to the then applicable Exercise Price per share
multiplied by the number of Shares then being purchased. Thereupon, the Investor, as the
holder of this Warrant, shall be entitled to receive from the Company a stock certificate
representing the number of Shares so purchased which shall be delivered to the Investor as
soon as

 

 

	 	 	 	possible and in any event within thirty (30) days of receipt of such notice, surrendered
Warrant and proper payment. The Investor shall be deemed to have become the holder(s) of
record of, and shall be treated for all purposes as the record holder(s) of, the Shares
represented thereby (and such Shares shall be deemed to have been issued) immediately prior
to the close of business on the date or dates upon which this Warrant is exercised.
	 
	 	4.	 	STOCK FULLY PAID: RESERVATION OF SHARES. The Shares that may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be fully paid
and non assessable, and free from all taxes, liens and charges with respect to the issue
thereof. During the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, subject to shareholder approval,
if required by applicable law, and reserved for the purpose of issuance upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of Shares to provide
for the exercise of the right represented by this Warrant.
	 
	 	5.	 	ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price shall be
subject to adjustment from time to time upon the occurrence of certain events, as follows:

	 	a.	 	Reclassification or Merger. If at any time while this
Warrant remains outstanding and unexpired, in case of any reclassification, change
or conversion of securities of the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination), or in
case of any merger of the Company with or into another corporation (other than a
merger with another corporation in which the Company is a continuing corporation
and which does not result in any reclassification or change of outstanding
securities issuable upon exercise of this Warrant), or in case of any sale of all
or substantially all of the assets of the Company, the Company, or such successor
or purchasing corporation, as the case may be, shall execute a new Warrant (in
form and substance reasonably satisfactory to the Investor) providing that the
Investor shall have the right to exercise such new Warrant and upon such exercise
to receive, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification, change or
merger by a holder of one share of Common Stock. Such new Warrant shall provide
for adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Paragraph 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, mergers and
transfers.

 

 

	 	b.	 	Subdivisions or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock the number of Shares issuable upon exercise hereof, shall
be proportionally adjusted and the Exchange Price shall be adjusted so that the
aggregate exercise price of this Warrant shall at all time remains equal.
	 
	 	c.	 	Common Stock Dividends. If the Company at any time while
this Warrant is outstanding and unexpired shall pay a dividend payable in shares
of Common Stock (except any distribution specifically provided for in the
foregoing subparagraphs (a) and (b)), then the Exercise Price shall be adjusted,
from and after the date of determination of shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Exercise
Price in effect immediately prior to such date of determination by a fraction (i)
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (ii) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution and the number of
Shares subject to this Warrant shall be proportionately adjusted.
	 
	 	d.	 	No Impairment. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all the
provisions of this Paragraph 5 and in the taking of all such action as maybe
necessary or appropriate in order to protect the rights of the Investor against
impairment.

	 	6.	 	NOTICE OF ADJUSTMENTS. Whenever the Exercise Price shall be adjusted
pursuant to the provisions hereof, the Company shall within thirty (30) days of such
adjustment deliver a certificate signed by its chief financial officer to the Investor
setting forth, in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise Price
after giving effect to such adjustment.
	 
	 	7.	 	FRACTIONAL SHARES. No fractional Shares of Common Stock will be issued in
connection with any exercise hereunder, but in lieu of such fractional Shares the Company
shall make a cash payment equal to the excess of the average daily closing price of the
Company’s common stock for the twenty (20) business days prior to the exercise date for
such fractional shares above the Warrant Price for such fractional share.

 

 

	 	8.	 	TRANSFERS AND EXCHANGES. This Warrant shall be transferable by the Investor
provided that the Investor in connection with such transfer delivers to the Company an
opinion of counsel, in form and substance satisfactory to the Company, that registration
is not required under the Securities Act of 1933, as amended, or any applicable state
securities laws.
	 
	 	9.	 	RIGHTS AS STOCKHOLDERS. The Investor, as holder of this Warrant, shall not be
entitled to vote or receive dividends or be deemed the holder of Common Stock, or any
other securities of the Company which may at any time be issuable on the exercise thereof
for any purpose, nor shall anything contained herein be construed to confer upon the
Investor, any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any meeting thereof,
or to receive notice of meetings, or to receive dividends or subscription rights or
otherwise until this Warrant shall have been exercised and the Shares purchasable upon the
exercise hereof shall have become deliverable, as provided herein.
	 
	 	10.	 	REPRESENTATIONS AND WARRANTIES OF THE COMPANY. This Warrant is issued and
delivered on the basis of the following:

	 	a.	 	This Warrant has been duly authorized and executed by the Company
and when delivered will be the valid and binding obligation of the Company
enforceable in accordance with its terms;
	 
	 	b.	 	The Shares have been duly authorized by the Company and when issued
in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable;
	 
	 	c.	 	The rights, preferences, privileges and restrictions granted to or
imposed upon the Shares and the Investor are as set forth in the Company’s
Articles of Incorporation, as amended;
	 
	 	d.	 	The execution and delivery of this Warrant are not, and the
issuance of the Shares upon exercise of this Warrant in accordance with the terms
hereof will not be, inconsistent with the Company’s Articles of Incorporation or
by-laws, do not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and do not and will not contravene
any provision of, or constitute a default under, any indenture, mortgage,
contract or other instrument of which the Company is a party or by which it is
bound or require the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by, any federal
state or local government authority or agency or other person.

 

 

	 	12.	 	REPRESENTATIONS AND WARRANTIES OF INVESTOR. The Investor hereby represents
and warrants that:

	 	a.	 	Purchase Entirely for Own Account. This Warrant is issued
to the Investor in reliance upon Investor’s
representation to the Company, which by its acknowledgment of this Warrant
Investor hereby confirms, that the Warrant and the Common Stock issuable upon
exercise of the Warrant (collectively, the “Securities”) will be acquired for
investment for the Investor’s own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and that the
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same. By acknowledging this Warrant, it does not have
any contract, undertaking, agreement, or arrangement with any person to sell,
transfer, or grant participations to such person or to any third person, with
respect to any of the Securities. It has full power and authority to acknowledge
this Warrant.
	 
	 	b.	 	Disclosure of Information. It has had an opportunity to
ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Warrant.
	 
	 	c.	 	Investment Experience. The Investor acknowledges that it
can bear the economic risk of its investment, and has not been organized solely
for the purpose of acquiring the Warrant.
	 
	 	d.	 	Accredited Investor. The Investor is an “accredited
investor” within the meaning of SEC Rule 501 of Regulation D, as presently in
effect.
	 
	 	e.	 	Restricted Securities. It understands that the Securities
it is purchasing are characterized as “restricted securities” under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act only in certain limited circumstances. In this connection, the Investor
represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Act.
	 
	 	f.	 	Legends. It is understood that the certificates evidencing
the Securities may bear one or all of the following legends:

	 	i.	 	“THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE
SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH

 

 

	 	 	 	A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE MORTGAGED, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION
OF COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT.”

	 	13.	 	MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the same is sought.
	 
	 	14.	 	NOTICES. All notices, demands or requests provided for or permitted to be
given pursuant to this Agreement must be in writing and shall be delivered or sent, with
the copies indicated, by personal delivery, telecopy (with confirmation and additional
copy sent by overnight delivery service) or overnight delivery service (by a reputable
international carrier) to the parties as follows (or at such other address as a party may
specify by notice given pursuant to this Section);

	 	 	 
	To Investor:

	 	ALESCO PREFERRED FUNDING IV, LTD.
	 

	 	c/o Cohen & Company Financial Management, LLC
	 

	 	2929 Arch Street, 17th Floor
	 

	 	Philadelphia, PA 19104-2870
	 

	 	Attn: Samuel Hillier, Director
	 

	 	Fax: (215) 701-8282
	 

	 	Email: shillier@cohenandcompany.com
	 
	 	 
	With a Copy to:

	 	DECHERT LLP
	 

	 	2929 Arch Street
	 

	 	Philadelphia, PA 19104
	 

	 	Attn: Ralph R. Mazzeo, Esq.
	 

	 	Fax: (215) 994-2222
	 

	 	Email: ralph.mazzeo@dechert.com
	 
	 	 
	To Company:

	 	PVF CAPITAL CORP.
	 

	 	30000 Aurora Road
	 

	 	Solon, Ohio 44139
	 

	 	Attn: Chief Executive Officer
	 

	 	Fax: (440) 914-3916

 

 

	 	 	 
	With a copy to:

	 	Krugliak, Wilkins, Griffiths
	 

	 	& Dougherty Co., L.P.A.
	 

	 	4775 Munson St. N.W.
	 

	 	P.O. Box 36963
	 

	 	Canton, Ohio 44735-6963
	 

	 	Attn: Randall C. Hunt,
	 

	 	Fax: (330) 497-4020
	 

	 	Email: rchunt@kwgd.com

	 	 	All notices shall be deemed given and received one business day after their delivery to the
addresses for the respective party(ies), with the copies indicated, as provided in this
Section 14.

	 	15.	 	BINDING EFFECT ON SUCCESSORS. The terms and provisions of this Warrant
shall be binding upon the Company and its respective successors and assigns and the
Investor. All of the obligations of the parties relating to the Common Stock issuable
upon the exercise of this Warrant shall survive the exercise and termination of this
Warrant and all of the covenants and agreements of each party relating thereto shall
inure to the benefit of the successors and assigns of the other. The Company will, at
the time of the exercise of this Warrant, in whole or in part, upon request of the
Investor but at the Company’s expense, acknowledge in writing its continuing obligation
to the Investor in respect of any rights (including, without limitation, any right to
registration of the shares of Registrable Securities) to which the Investor shall
continue to be entitled after such exercise in accordance with this Warrant; provided,
that the failure of the Investor to make any such request shall not affect the continuing
obligation of the Company to the Investor in respect of such rights.
	 
	 	16.	 	LOST WARRANTS OR STOCK CERTIFICATES. The Company covenants to the Investor
that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant or any stock certificate and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and cancellation of
such Warrant or stock certificate, the Company will make and deliver a new Warrant or
stock certificate, or like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.

 

 

	 	17.	 	DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs
of this Warrant are inserted for convenience only and do not constitute a part of this
Warrant.
	 
	 	18.	 	GOVERNING LAW. This Agreement and the interpretation of its terms shall be
governed by the laws of the State of New York, without application of conflicts of law
principles.
	 
	 	19.	 	CONFIDENTIALITY; NO PUBLIC DISCLOSURE. The terms and conditions of this
Warrant are confidential. Neither party shall make any public disclosure concerning the
terms and conditions of this Warrant without the prior written consent of the other
party, except as required by the rules and regulations of the Securities and Exchange
Commission, the Nasdaq National Market or any other applicable stock exchanges.
	 
	 	20.	 	ATTORNEYS FEES. Except as otherwise set forth in the Exchange Agreement,
the Company and Investor shall pay their respective attorneys’ fees and expenses for the
negotiation and preparation of this Warrant and the other agreements contemplated by this
Warrant.
	 
	 	21.	 	COUNTERPARTS. This Agreement may be executed and delivered in two or more
counterparts, each of which shall be deemed to be an original and all of which, taken
together, shall be deemed to be one agreement.

[Remainder of Page Intentionally Left Blank]

 

 

     The parties have executed this Warrant as of the date set forth above.

	 	 	 	 	 
	Investor: 	ALESCO PREFERRED FUNDING IV, LTD. 	 
	 	By: 	
COHEN & COMPANY FINANCIAL 

MANAGEMENT, LLC, solely in its capacity as Manager

 	 
	 	By:  	/s/ Samuel Hillier 	 
	 	 	Name:  	Samuel Hillier 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	Company: 	PVF CAPITAL CORP.,

An Ohio corporation

 	 
	 	By:  	/s/ Marty E. Adams 	 
	 	 	Name:  	Marty E. Adams 	 
	 	 	Title:  	Interim CEO 	 

 

 

EXHIBIT A

NOTICE OF EXERCISE

To: PVF CAPITAL CORP.

30000 Aurora Road

Solon, Ohio 44139

Attn:

	 	1.	 	The undersigned hereby elects to purchase _____ Shares of Common Stock of PVF
CAPITAL CORP. pursuant to the terms of the attached Warrant, and tenders herewith payment
of the purchase price of such Shares in full.
	 
	 	2.	 	Please issue a certificate or certificates representing said Shares in the name of the
undersigned or in such other name or names as are specified below:

	 	 	 	 
	Name:

	 	 
	 
	 	 
	Address:
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

	 	3.	 	The undersigned represents that the aforesaid Shares being acquired for the account of
the undersigned for investment and not with a view to, or for resale in connection with,
the distribution thereof and that the undersigned has no present intention of distributing
or reselling such Shares.

 

 

	 	 	 	 	 
	 	ALESCO PREFERRED FUNDING IV, LTD.
	 	By:	
COHEN & COMPANY FINANCIAL
 MANAGEMENT, LLC, solely in its capacity as Manager

 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Samuel Hillier 	 
	 	 	Title:  	Director

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