Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.39

DEBT ASSUMPTION AGREEMENT

THIS DEBT ASSUMPTION AGREEMENT (the “Agreement”) made as of the 26th day of
July, 2007, by and between Rio Vista Energy Partners L.P., a Delaware limited partnership
(“Parent”) and Regional Enterprises, Inc., a Virginia corporation (“Merger Sub”).

RECITALS:

Parent owns 100.00% of the issued and outstanding shares of capital stock of Merger Sub.

Merger Sub has acquired by merger all of the assets and liabilities of Regional Enterprizes,
Inc., a Virginia corporation (“Company”).

To consummate the merger with the Company, Merger Sub paid (or will pay) to the shareholders
of the Company the approximate sum of up to $9,000,000.

To finance the acquisition of the Company, Parent advanced to Merger Sub the sum of $500,000
as a capital contribution and the sum of $2,500,000 as a loan and Merger Sub became obligated for a
loan in the amount of $5,000,000 from RZB Finance LLC (“Lender”) made to Parent under Parent’s new
borrowing facility with the Lender (the “RZB Advance”), which Parent advanced to Merger Sub and
which is evidenced by the promissory note attached hereto (the “Debt Assumption Note”).

Notwithstanding the provisions of the Debt Assumption Note, Merger Sub and Parent intend for
Merger Sub to be primarily responsible for the RZB Advance and are entering into this Agreement to
formalize and document such intention, provided that this Agreement shall not limit or impair any
of RZB’s rights or remedies against Parent, Merger Sub or any other obligor.

AGREEMENT:

NOW, THEREFORE, in consideration of the premises and of the mutual covenants hereinafter set
forth, the parties hereto, intending to be legally bound, hereby agree as follows:

 

 

 

Notwithstanding the Debt Assumption Note:

1) Parent and Merger Sub agree that Primary responsibility for the repayment of the RZB
Advance shall be the sole obligation of Merger Sub, but the foregoing is not intended to and shall
not limit or impair any of RZB’s rights or remedies against Parent, merger Sub, or any other
obligor.;

2) All payments due and payable under the Debt Assumption Note shall be paid by Merger Sub
directly to Lender; and

3) Parent and Merger Sub agree to take commercially reasonable action to induce the Lender to
redraw the documents related to the RZB Advance to reflect this Agreement, but acknowledge that RZB
has no commitment or agreement to comply with any request to do so and maybe unwilling to do so.

This Debt Assumption Agreement shall terminate and be of no further force or effect on and
after the earlier of the date on which (i) the documents that evidence the RZB Advance are amended
to substitute Merger Sub for Parent as the primary obligor thereon, or (ii) Parent provides written
notification to Merger Sub that this Agreement is terminated. Termination shall not limit or
impair Merger Sub’s obligations under the Debt Assumption Note without the prior written consent of
RZB.

In Witness Whereof, this Debt Assumption Agreement is hereby executed and delivered this 26th
day of July, 2007.

	 	 	 	 	 	 	 
	RIO VISTA ENERGY PARTNERS L.P.	 	REGIONAL ENTERPRISES, INC.
	 
	 	 	 	 	 	 
	By:

	 	Rio Vista GP LLC, General Partner	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Ian T. Bothwell
	 	By:
	 	/s/ Ian T. Bothwell
	 

	 	 
	 	 	 	 
	Title:

	 	Acting Chief Executive Officer
	 	Title:
	 	President

 

2Filed by Bowne Pure Compliance

 

Exhibit 10.40

DEBT ASSUMPTION NOTE

	 	 	 
	$5,000,000

	 	Hopewell, Virginia
	 

	 	July 26, 2007

FOR VALUE RECEIVED, the undersigned, Regional Enterprises, Inc., a Virginia corporation
(“Borrower”), hereby unconditionally promises to pay to the order of Rio Vista Energy Partners
L.P., a Delaware limited partnership (the “Lender”), at c/o RZB Finance LLC, 1133 Avenue of the
Americas, New York, NY 10036, or at such other place as Lender may direct in writing, the principal
amount of Five Million United States Dollars (US$5,000,000) payable on (i) DEMAND (the “Maturity
Date”), as such date may be extended by the Lender, or (ii) the date of any payment made under the
Note, as hereinafter defined.

This Debt Assumption Note is issued pursuant to a Debt Assumption Agreement dated as of even
date herewith between the Lender and Borrower. Until the termination of the Debt Assumption
Agreement, all payments due to the Lender under this Debt Assumption Note shall be paid to RZB
Finance LLC.

This Debt Assumption Note, together with interest hereon and other charges due, shall be due
and payable on the same dates and in the same amounts as payments (including mandatory prepayments)
are due under, and shall bear interest at the same rate or rates as set forth in, that certain Note
of even date herewith in the original principal amount of $5,000,000 made by the Lender and payable
to the order of RZB Finance LLC (as the same may be modified, extended or renewed, the “Note”),
issued by the Lender pursuant to the terms of a Loan Agreement of even date herewith between the
Lender and RZB Finance LLC (as the same may be modified, extended or renewed, the “Loan
Agreement”). Reference is hereby made to the Loan Agreement for provisions relating to interest
rates, prepayment, default, default interest and acceleration of the Note. In the event of any
modification or amendment to the Note (which shall include any note given in substitution,
extension, renewal or refinancing of the Note), Borrower agrees to execute and deliver to the
Lender a conforming amendment or modification to this Debt Assumption Note, or a conforming new
note in substitution, extension, renewal or refinancing of this Debt Assumption Note.

The final payment on the Maturity Date shall equal the entire principal balance outstanding
hereunder on such date, and Borrower agrees to pay interest on the unpaid principal amount hereof
for the period commencing on the date hereof until payment in full at the rates per annum and on
the dates set forth in the Note.

Interest on this Debt Assumption Note shall be computed on the daily principal balance on the
basis of a 360 day year for the actual number of days elapsed in the period during which it
accrues.

Borrower may, at any time upon not less than three (3) Business Days’ prior notice to Lender
prepay this Debt Assumption Note in whole or in part. Each prepayment shall be permanent and
irrevocable and shall be accompanied by a payment of all interest accrued through and including
such date.

 

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All prepayments provided for in this Debt Assumption Note shall be without premium or penalty.
All voluntary prepayments shall be in integral multiples of $50,000 or the outstanding principal
balance of this Debt Assumption Note. Once prepaid, whether in whole or in part, the prepaid
amount of this Note may not be reborrowed. All prepayments of this Debt Assumption Note or any
portion thereof shall be made together with payment of all interest accrued on the amount repaid
through the date of such prepayment. Prepayments of a LIBOR Loan (as defined in the Loan
Agreement) may be made only on the last day of the Interest Period (as defined in the Loan
Agreement) applicable to such Loan, unless Lender otherwise agrees.

Payments of both principal and interest on this Debt Assumption Note are to be made in United
States Dollars and in immediately available funds. Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, the payment may be made on the next
succeeding Business Day, and such extension of time shall be included in the computation of the
amount of interest or fees due hereunder.

This Debt Assumption Note may not be modified, amended, waived, extended, changed, discharged
or terminated orally or by any act or failure to act on the part of Borrower or the Lender, but
only by an agreement in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.

Borrower shall pay all costs and expenses of collection, including, without limitation,
reasonable attorneys’ fees and disbursements, incurred by the Lender in connection with collection
or enforcement of this Debt Assumption Note.

BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED HEREBY, THIS            DEBT ASSUMPTION            NOTE, OR THE
OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR
AGENTS IN CONNECTION THEREWITH.

Except to the extent such waiver is prohibited by law, Borrower waives presentment,
demand and protest and notice of presentment, demand, protest and non-payment and any other notice
of any kind in connection with this Debt Assumption Note.

[Signature page follows]

 

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THIS DEBT ASSUMPTION NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING TO CONFLICTS OF LAWS.

	 	 	 	 	 
	 	Regional Enterprises, Inc.

 	 
	 	By:  	/s/ Ian T. Bothwell
 	 
	 	Name:  	Ian T. Bothwell 	 
	 	Title:  	President 	 
	 

[Signature page to Debt Assumption Note]

 

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ALLONGE TO NOTE

This Allonge to a certain note (the “Debt Assumption Note”) dated July 26, 2007
in the original principal amount of $5,000,000.00 made by Regional Enterprises, Inc., a Virginia
corporation, and payable to the order of Rio Vista Energy Partners L.P., provides:

	 	 	 	 	 	 	 	 	 
	          PAY TO THE ORDER OF RZB FINANCE LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Rio Vista Energy Partners L.P.,	 	 
	 	 	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Rio Vista GP LLC,	 	 
	 

	 	 	 	 	 	its sole general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By: By:
	 	/s/ Ian T. Bothwell
	 	Date: July 26, 2007
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Acting Chief Executive Officer	 	 

This Allonge shall be physically attached to the Debt Assumption Note

 

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