Exhibit 10.1(a)

 

UNCONDITIONAL GUARANTY

 

THIS UNCONDITIONAL GUARANTY (this "Guaranty") dated as of October 3, 2016, is
made by NYTIS EXPLORATION COMPANY LLC, a Delaware limited liability company,
NYTIS EXPLORATION (USA) INC., a Delaware corporation, each a Subsidiary of
CARBON NATURAL GAS COMPANY, a Delaware corporation ("Borrower"), whether as an
original signatory hereto or as an Additional Guarantor (together with each such
Person's permitted successors and permitted assigns, collectively, "Guarantors"
and each individually, a "Guarantor"), in favor of LEGACYTEXAS BANK, as
administrative agent for the benefit of the Guaranteed Parties, as defined
herein (in such capacity, "Administrative Agent"), and is executed and delivered
pursuant to that certain Credit Agreement dated as of the date hereof (as the
same may be amended, restated or modified from time to time, the "Credit
Agreement") among Administrative Agent, the financial institutions party thereto
(the "Lenders") and Borrower.

 

WHEREAS, Borrower has executed and delivered the Credit Agreement, and to induce
the Guaranteed Parties to make the loans and other financial accommodations
provided for in the Credit Agreement and any Bank Product Agreements, Guarantors
have agreed to guarantee the payment and satisfaction of the Obligations and to
execute and deliver this Guaranty; and

 

WHEREAS, each Guarantor is a Subsidiary of Borrower, and each Guarantor desires
that the Guaranteed Parties extend credit and make financial accommodations to
Borrower as contemplated by the Credit Agreement, and each Guarantor will
directly or indirectly benefit from the extensions of credit and financial
accommodations for the purposes for which the credit and financial
accommodations are being extended pursuant to the Credit Agreement and the Bank
Product Agreements; and

 

WHEREAS, each Guarantor, by and through the action of its governing body, has
determined that it may reasonably be expected to benefit, directly or
indirectly, from guarantying the Obligations, all as hereinafter provided;

 

NOW, THEREFORE, in consideration of the foregoing, and intending to be legally
bound hereby, Guarantors guarantee to the Guaranteed Parties the prompt and full
payment and performance of the Obligations upon the following terms and
conditions:

 

1.       Definitions. Capitalized terms used herein which are defined in the
Credit Agreement have the meanings provided therefor in the Credit Agreement
unless the context hereof otherwise requires or provides. As used herein:

 

"Guaranteed Parties" means the collective reference to Administrative Agent,
each Lender, the L/C Issuer, each Bank Product Provider and any other Person the
Obligations owing to which are, or are purported to be, guaranteed under the
terms hereof.

 

"Release Date" means the last to occur of the dates on which Liens securing the
Obligations may be released pursuant to Section 11.9(a)(i) of the Credit
Agreement.

 

UNCONDITIONAL GUARANTY – Page 1 

 

 

2.       Guaranty.

 

(a)       In consideration of loans, advances or other credit heretofore or
hereafter granted by the Guaranteed Parties to Borrower pursuant to the Credit
Agreement and in further consideration of any Bank Product Agreements,
Guarantors hereby, jointly and severally, unconditionally, absolutely and
irrevocably, guarantee to the Guaranteed Parties the due and punctual payment at
maturity, whether by acceleration or otherwise, and the due fulfillment and
performance of the Obligations. Each Guarantor is jointly and severally liable
for the full payment and performance of the Obligations as a primary obligor.

 

(b)       In order to provide for just and equitable contribution among the
Guarantors, subject to Section 6 hereof, the Guarantors agree that in the event
a payment shall be made on any date under this Guaranty by any Guarantor (the
"Funding Guarantor"), each other Guarantor (each a "Contributing Guarantor")
shall indemnify the Funding Guarantor in an amount equal to the amount of such
payment, in each case multiplied by a fraction the numerator of which shall be
the net worth of the Contributing Guarantor as of such date and the denominator
of which shall be the aggregate net worth of all the Contributing Guarantors
together with the net worth of the Funding Guarantor as of such date. Any
Contributing Guarantor making any payment to a Funding Guarantor pursuant to
this Section 2(b) shall be subrogated to the rights of such Funding Guarantor to
the extent of such payment.

 

3.       Payment. If any of the Obligations is not punctually paid when the same
becomes due and payable, either by its terms or as a result of the exercise of
any power to accelerate, Guarantors shall, immediately on demand and without
presentment, protest, notice of protest, notice of nonpayment, notice of intent
to accelerate, notice of acceleration or any other notice whatsoever (all of
which are expressly waived in accordance with Section 4 hereof), pay to
Administrative Agent the amount due and payable thereon at its office specified
in the Credit Agreement. It is not necessary for Administrative Agent, in order
to enforce such payment by Guarantors, first to institute suit or exhaust its
remedies against Borrower or others liable on the Obligations, or to enforce its
rights against any security given to secure the Obligations. Administrative
Agent is not required to mitigate damages or take any other action to reduce,
collect or enforce the Obligations. No setoff, counterclaim, reduction or
diminution of any obligation, or any defense of any kind which any Guarantor has
or may have against Borrower or any Guaranteed Party shall be available
hereunder to Guarantors. No payment by any Guarantor shall discharge the
liability of Guarantors hereunder until the Obligations have been fully
satisfied and the Release Date shall have occurred. If Administrative Agent must
rescind or restore any payment, or any part thereof, received by Administrative
Agent on any part of the Obligations, any prior release or discharge from the
terms of this Guaranty given Guarantors by Administrative Agent or any reduction
of any Guarantor's liability hereunder shall be without effect, and this
Guaranty shall remain in full force and effect. Each Guarantor shall make all
payments hereunder without setoff or counterclaim and free and clear of and
without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless such Guarantor
is compelled by law to make such deduction or withholding. If any such
obligation (other than one arising with respect to taxes based on or measured by
the income or profits of the Guaranteed Parties) is imposed upon any Guarantor
with respect to any amount payable by it hereunder, such Guarantor will pay to
the Administrative Agent, on behalf of the Guaranteed Parties, on the date on
which such amount is due and payable hereunder, such additional amount in
Dollars as shall be necessary to enable the Guaranteed Parties to receive the
same net amount which the Guaranteed Parties would have received on such due
date had no such obligation been imposed upon such Guarantor. Each Guarantor
will deliver promptly to the Administrative Agent, on behalf of the Guaranteed
Parties, certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by such Guarantor hereunder.
The obligations of each Guarantor under this Section 3 shall survive the payment
in full of the Obligations and termination of this Guaranty.

 

UNCONDITIONAL GUARANTY – Page 2 

 

 

4.       Agreements and Waivers. To the extent not prohibited by applicable Law,
each Guarantor:

 

(a)       agrees to all terms and agreements heretofore or hereafter made by
Borrower with Administrative Agent and/or any other Guaranteed Party;

 

(b)       agrees that Administrative Agent may without impairing its rights or
the obligations of such Guarantor hereunder (i) waive or delay the exercise of
any of its rights or remedies against or release Borrower or any other Person,
including, without limitation, any other Person who is or whose Property is
liable with respect to the Obligations or any part thereof (Guarantors and any
such other Person or Persons are hereafter collectively called the "Sureties"
and each individually called a "Surety"); (ii) take or accept any other
security, collateral or guaranty, or other assurance of the payment of all or
any part of the Obligations; (iii) release, surrender, exchange, or subordinate
any collateral, property or security, at any time existing in connection with,
or assuring or securing payment of, all or any part of the Obligations or the
liability of such Guarantor or any other Surety; (iv) increase, renew, extend,
or modify the terms of any of the Obligations or any instrument or agreement
evidencing the same; (v) apply payments by Borrower, any Surety, or any other
Person to any of the Obligations; (vi) bring suit against any one or more
Sureties without joining any other Surety or Borrower in such proceeding; (vii)
compromise or settle with any one or more Sureties in whole or in part for such
consideration or no consideration as Administrative Agent may deem appropriate;
or (viii) partially or fully release any Guarantor or any other Surety from
liability hereunder;

 

(c)       agrees that the obligations of such Guarantor under this Guaranty
shall not be released, diminished, or adversely affected by any of the
following: (i) the insolvency, bankruptcy, rearrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of Borrower
or any Surety; (ii) the invalidity, illegality or unenforceability of all or any
part of the Obligations or any document or agreement executed in connection with
the Obligations, for any reason, or the fact that any debt included in the
Obligations exceeds the amount permitted by law; (iii) the fact that any
collateral, security, security interest or Lien contemplated or intended to be
given, created or granted as security for the repayment of the Obligations is
not properly perfected or created, or proves to be unenforceable or subordinate
to any other security interest or Lien; (iv) the fact that Borrower has any
defense to the payment of all or any part of the Obligations; (v) any payment by
Borrower or any Surety to Administrative Agent and/or any other Guaranteed Party
is a preference under applicable Debtor Relief Laws, or for any reason
Administrative Agent and/or any other Guaranteed Party is required to refund
such payment or pay such amounts to Borrower, any such Surety, or someone else;
(vi) any defenses which Borrower could assert on the Obligations, including but
not limited to failure of consideration, breach of warranty, fraud, accord and
satisfaction, strict foreclosure, statute of frauds, bankruptcy, statute of
limitations, lender liability and usury; or (vii) any other action taken or
omitted to be taken with respect to the Credit Agreement, the Loan Documents,
the Obligations, the security and the collateral therefor whether or not such
action or omission prejudices such Guarantor or any Surety or increases the
likelihood that such Guarantor will be required to pay the Obligations pursuant
to the terms hereof;

 

(d)       agrees that such Guarantor is obligated to pay the Obligations when
due, notwithstanding any occurrence, circumstance, event, action or omission
whatsoever whether or not particularly described herein, except for the full and
final payment and satisfaction of the Obligations;

 

(e)       waives all rights and remedies now or hereafter accorded by applicable
Law to guarantors or sureties, including without limitation any defense, right
of offset or other claim which such Guarantor may have against Borrower or which
Borrower may have against Administrative Agent and/or the Guaranteed Parties;

 

(f)       waives all notices whatsoever with respect to this Guaranty or with
respect to the Obligations, including, but without limitation, notice of (i)
Administrative Agent's and/or the Guaranteed Parties' acceptance hereof or its
or their intention to act, or its or their action, in reliance hereon; (ii) the
present existence, future incurring, or any amendment of the provisions of any
of the Obligations or any terms or amounts thereof or any change therein in the
rate of interest thereon; (iii) any default by Borrower or any Surety; or (iv)
the obtaining, enforcing, or releasing of any guaranty or surety agreement (in
addition hereto), pledge, assignment, or other security for any of the
Obligations;

 

UNCONDITIONAL GUARANTY – Page 3 

 

 

(g)       waives notice of presentment for payment, notice of protest, protest,
demand, notice of intent to accelerate, notice of acceleration and notice of
nonpayment, protest in relation to any instrument evidencing any of the
Obligations, and any demands and notices required by Law, except as such waiver
may be expressly prohibited by Law, and diligence in bringing suits against any
Surety; and

 

(h)       waives each right to which it may be entitled by virtue of the laws of
the State of Texas governing or relating to suretyship and guaranties,
including, without limitation, any rights under Rule 31, Texas Rules of Civil
Procedure, Chapter 51 of the Texas Property Code, Section 17.001 of the Texas
Civil Practice and Remedies Code, Section 3.605 of the UCC, and Chapter 43 of
the Texas Civil Practice and Remedies Code, as any or all of the same may be
amended or construed from time to time, or the common law of the State of Texas
at all relevant times.

 

5.       Liability. The liability of each Guarantor under this Guaranty is
irrevocable, absolute and unconditional, without regard to the liability of any
other Person, and shall not in any manner be affected by reason of any action
taken or not taken by Administrative Agent and/or any other Guaranteed Party,
which action or inaction is herein consented and agreed to, nor by the partial
or complete unenforceability or invalidity of any other guaranty or surety
agreement, pledge, assignment or other security for any of the Obligations. No
delay in making demand on Sureties or any of them for satisfaction of the
liability hereunder shall prejudice Administrative Agent's right to enforce such
satisfaction. All of Administrative Agent's rights and remedies shall be
cumulative and any failure of Administrative Agent to exercise any right
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right at any time, and from time to time, thereafter. This is a
continuing guaranty of payment, not a guaranty of collection, and this Guaranty
shall be binding upon Guarantors regardless of how long before or after the date
hereof any of the Obligations were or are incurred.

 

6.       Subordination. If Borrower or any other Obligated Party is now or
hereafter becomes indebted to one or more Guarantors (such indebtedness and all
interest thereon is referred to as the "Affiliated Debt"), such Affiliated Debt
shall be subordinate in all respects to the full payment and performance of the
Obligations, and no Guarantor shall be entitled to enforce or, during the
existence of an Event of Default, receive payment with respect to any Affiliated
Debt until the Release Date. Each Guarantor agrees that any Liens, mortgages,
deeds of trust, security interests, judgment liens, charges or other
encumbrances upon Borrower's or any other Obligated Party's assets securing the
payment of the Affiliated Debt shall be and remain subordinate and inferior to
any Liens, security interests, judgment liens, charges or other encumbrances
upon Borrower's or any other Obligated Party's assets securing the payment of
the Obligations, and without the prior written consent of Administrative Agent,
no Guarantor shall exercise or enforce any creditor's rights of any nature
against Borrower or any other Obligated Party to collect the Affiliated Debt
(other than demand payment therefor). In the event of the receivership,
bankruptcy, reorganization, arrangement, debtor's relief or other insolvency
proceedings involving Borrower or any applicable Obligated Party as a debtor,
Administrative Agent has the right and authority, either in its own name or as
attorney-in-fact for any applicable Guarantor, to file such proof of debt,
claim, petition or other documents and to take such other steps as are necessary
to prove its rights hereunder and receive directly from the receiver, trustee or
other court custodian, payments, distributions or other dividends which would
otherwise be payable upon the Affiliated Debt. Each Guarantor hereby assigns
such payments, distributions and dividends to Administrative Agent, and
irrevocably appoints Administrative Agent as its true and lawful
attorney-in-fact with authority to make and file in the name of such Guarantor
any proof of debt, amendment of proof of debt, claim, petition or other document
in such proceedings and to receive payment of any sums becoming distributable on
account of the Affiliated Debt, and to execute such other documents and to give
acquittances therefor and to do and perform all such other acts and things for
and on behalf of such Guarantor as may be necessary in the opinion of
Administrative Agent in order to have the Affiliated Debt allowed in any such
proceeding and to receive payments, distributions or dividends of or on account
of the Affiliated Debt.

 

UNCONDITIONAL GUARANTY – Page 4 

 

 

7.       Subrogation. No Guarantor waives or releases any rights of subrogation,
reimbursement or contribution which such Guarantor may have, after full and
final payment of the Obligations, against others liable on the Obligations. Each
Guarantor's rights of subrogation and reimbursement are subordinate in all
respects to the rights and claims of Administrative Agent and the other
Guaranteed Parties, and no Guarantor may exercise any rights it may acquire by
way of subrogation under this Guaranty, by payment made hereunder or otherwise,
until the Release Date. If any amount is paid to any Guarantor on account of
such subrogation rights prior to the Release Date, such amount shall be held in
trust for the benefit of Administrative Agent and/or the other Guaranteed
Parties to be credited and applied on the Obligations, whether matured or
unmatured. If all Obligations have been paid in full and on the Release Date,
there is no proceeding pending to recover any payments made on or transfers of
property with respect to the Obligations from Lenders, such trust shall be
released. If on the Release Date, any proceeding to recover payments made on or
transfers of property with respect to the Obligations from Lenders is pending,
such funds shall be held in trust until the final resolution of such proceeding.

 

8.       Other Indebtedness or Obligations of Guarantors. If any Guarantor is or
becomes liable for any indebtedness owed by Borrower or any other Obligated
Party to the Guaranteed Parties by endorsement or otherwise than under this
Guaranty, such liability shall not be affected by this Guaranty, and the rights
of Administrative Agent and the Guaranteed Parties hereunder shall be cumulative
of all other rights that Administrative Agent and the Guaranteed Parties may
have against such Guarantor. The exercise by Administrative Agent of any right
or remedy hereunder or under any other instrument or at law or in equity shall
not preclude the concurrent or subsequent exercise of any other instrument or
remedy at law or in equity and shall not preclude the concurrent or subsequent
exercise of any other right or remedy. Further, without limiting the generality
of the foregoing, this Guaranty is given by Guarantors as an additional guaranty
to all guaranties heretofore or hereafter executed and delivered to
Administrative Agent and/or the Guaranteed Parties by Guarantors in favor of
Administrative Agent and/or the Guaranteed Parties relating to the indebtedness
of Borrower and the other Obligated Parties to the Guaranteed Parties, and
nothing herein shall be deemed to replace or be in lieu of any other of such
previous or subsequent guarantees.

 

9.       Representations. Each Guarantor represents as follows:

 

(a)       such Guarantor has received, or will receive, direct or indirect
benefit from the Obligations and from the making of this Guaranty;

 

(b)       such Guarantor is familiar with, and has independently reviewed the
books and records regarding, the financial condition of Borrower and is familiar
with the value of any and all Collateral intended to be created as security for
the payment of the Obligations, but such Guarantor is not relying on such
financial condition, the collateral, or the agreement of any other party to
become a Surety as an inducement to enter into this Guaranty;

 

(c)       neither Administrative Agent, any Guaranteed Party, any Surety, nor
any other Person has made any representation, warranty or statement to such
Guarantor in order to induce such Guarantor to execute this Guaranty;

 

UNCONDITIONAL GUARANTY – Page 5 

 

 

(d)       as of the date hereof, and after giving effect to this Guaranty and
the contingent obligation evidenced hereby, such Guarantor is, and will be,
Solvent and has not entered into any transaction with the intent to hinder,
delay or defraud a creditor;

 

(e)       the execution, delivery, and performance by such Guarantor of this
Guaranty and the other Loan Documents to which such Guarantor is or may become a
party and compliance with the terms and provisions hereof and thereof have been
duly authorized by all requisite action on the part of such Guarantor and do not
and will not (i) violate or conflict with, or result in a breach of, or require
any consent under (x) the Constituent Documents of such Person, (y) any
applicable Law, rule, or regulation or any order, writ, injunction, or decree of
any Governmental Authority or arbitrator, or (z) any agreement or instrument to
which such Guarantor is a party or by which it or any of its Properties is bound
or subject which could result in a Material Adverse Event, or (ii) constitute a
default under any such agreement or instrument which could result in a Material
Adverse Event, or result in the creation or imposition of any Lien upon any of
the revenues or assets of such Guarantor;

 

(f)       the governing body of such Guarantor, acting pursuant to a duly called
and constituted meeting, after proper notice, or pursuant to a valid unanimous
consent, has determined that (i) such Guarantor has received, or will receive,
direct or indirect benefit from the Obligations and the making of this Guaranty,
and (ii) this Guaranty is in the best interests of such Guarantor; and

 

(g)       such Guarantor (i) is duly incorporated or organized, as the case may
be, validly existing, and in good standing under the Laws of the jurisdiction of
its incorporation or organization, (ii) has all requisite power and authority to
own its assets and carry on its business as now being or as proposed to be
conducted, and (iii) is qualified to do business in all jurisdictions in which
the nature of its business makes such qualification necessary and where failure
to so qualify could result in a Material Adverse Event, and (iv) has the power
and authority to execute, deliver and perform its obligations under this
Guaranty and the other Loan Documents to which it is or may become a party.

 

10.       Covenants of Guarantors. So long as the Credit Agreement is in effect
and until the Release Date, unless compliance has been waived in writing by
Administrative Agent, each Guarantor will

 

(a)       promptly give written notice to Administrative Agent of (i) any
action, proceeding or claim of which such Guarantor may have notice, which may
be commenced or asserted against such Guarantor or relate to this Guaranty and
(ii) any dispute which may exist between such Guarantor and any Governmental
Authority, which in either case may substantially affect the properties and
assets of such Guarantor;

 

(b)       pay or discharge at or before maturity or before becoming delinquent
(i) all taxes, levies, assessments, and governmental charges imposed on it or
its income or profits or any of its Property, and (ii) all lawful claims for
labor, material, and supplies, which, if unpaid, might become a Lien upon any of
its Property; provided, however, such Guarantor shall not be required to pay or
discharge any tax, levy, assessment, or governmental charge which is being
contested in good faith by appropriate proceedings diligently pursued, and for
which adequate reserves in accordance with GAAP have been established;

 

(c)       allow any representative of Administrative Agent or any Lender to
visit and inspect any of its Properties and to examine its books and records in
accordance with Section 7.6 of the Credit Agreement;

 

UNCONDITIONAL GUARANTY – Page 6 

 

 

(d)       not wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation unless permitted by Section 8.3 of the
Credit Agreement; and

 

(e)       not Dispose of any of its assets, except in accordance with Section
8.8 of the Credit Agreement.

 

11.       Setoff. If an Event of Default exists, Administrative Agent and each
Guaranteed Party shall have the right to set off against the Obligations, at any
time and without prior notice to any Guarantor (but in any event in accordance
with Section 4.3 of the Credit Agreement), any and all deposits (general or
special, time or demand, provisional or final) or other sums at any time
credited by or owing from Administrative Agent or such Guaranteed Party to such
Guarantor whether or not the Obligations under the Loan Documents are then due
and irrespective of whether or not such Guaranteed Party shall have made demand
under this Guaranty or any other Loan Document and although such Obligations may
be contingent or unmatured or denominated in a currency different from that of
the applicable deposit or indebtedness. Each Guaranteed Party agrees promptly to
notify the affected Guarantor and Administrative Agent after any such set-off
and application made by such Guaranteed Party; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.

 

12.       Costs and Expenses. Guarantors jointly and severally agree to pay to
Administrative Agent and the Guaranteed Parties, upon demand, all documented
out-of-pocket costs and expenses, including attorneys' fees, that may be
incurred by Administrative Agent and the Guaranteed Parties in attempting to
cause the Obligations to be satisfied or in attempting to cause satisfaction of
Guarantors' liability under this Guaranty.

 

13.       Exercising Rights, Etc. No notice to or demand upon any Guarantor in
any case shall, of itself, entitle such Guarantor or any other Guarantor to any
other or further notice or demand in similar or other circumstances. No delay or
omission by Administrative Agent in exercising any power or right hereunder
shall impair such right or power or be construed as a waiver thereof or any
acquiescence therein, nor shall any single or partial exercise of any such power
preclude other or further exercise thereof, or the exercise of any other right
or power hereunder.

 

14.       Reference to Credit Agreement; Incorporation of Certain Provisions by
Reference. Reference is hereby made to the representations, warranties and
covenants of the Borrower set forth in Articles 6, 7, and 8 of the Credit
Agreement which are incorporated herein by reference for all purposes. Each
Guarantor (a) reaffirms that each such representation and warranty is true and
correct in every material respect with respect to such Guarantor to the extent
that such representation and warranty refers to such Guarantor, and (b) agrees,
with respect to the covenants, to take, or refrain from taking, as the case may
be, each action that is necessary to be taken or not taken, as the case may be,
so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries. Further, the provisions of Section 12.12 of the Credit Agreement
captioned "Governing Law; Venue; Service of Process" and Section 12.18 of the
Credit Agreement captioned "WAIVER OF JURY TRIAL" are incorporated herein by
reference for all purposes. If the Credit Agreement shall cease to remain in
effect for any reason whatsoever during any period and any part of the
Obligations remain unpaid, then the terms, covenants, and agreements set forth
therein applicable to the Guarantors shall nevertheless continue in full force
and effect as obligations of each Guarantor under this Guaranty.

 

15.       Notices. All notices and other communications provided for herein
shall be in writing and shall be delivered in accordance with Section 12.11 of
the Credit Agreement as follows:

 

(a)       if to Guarantors, at their addresses set forth on the signature pages
hereof; and

 

(b)       if to Administrative Agent, as provided in Schedule 12.11 of the
Credit Agreement.

 

UNCONDITIONAL GUARANTY – Page 7 

 

 

16.       Benefit; Binding Effect. This Guaranty shall inure to the benefit of
Administrative Agent and each other Guaranteed Party and their respective
successors and assigns, and to any interest in any of the Obligations. All of
the obligations of Guarantors arising hereunder shall be jointly and severally
binding on each of the Persons signing this Guaranty, and their respective
successors and assigns (provided, however, that no Guarantor may, without the
prior written consent of Administrative Agent, in each instance, assign or
delegate any of its rights, powers, duties or obligations hereunder, and any
attempted assignment or delegation made without Administrative Agent's prior
written consent shall be void ab initio and of no force or effect).

 

17.       Entirety and Amendments. This Guaranty embodies the entire agreement
between the parties and supersedes all prior agreements, conditions, and
understandings, if any, relating to the subject matter hereof and thereof, and
this Guaranty may be amended only by an instrument in writing executed by
Guarantors, Administrative Agent (with the requisite consent, if any, of the
Required Lenders or all Lenders in accordance with the Credit Agreement).

 

18.       Counterparts. This Guaranty may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Guaranty and all of which, when taken together, will be deemed to constitute one
and the same Guaranty. Delivery of an executed counterpart of a signature page
of this Guaranty by facsimile or other electronic imaging means (e.g. "pdf" or
"tif") shall be effective as delivery of a manually executed counterpart of this
Guaranty.

 

19.       Multiple Guarantors. It is specifically agreed that Administrative
Agent may enforce the provisions hereof with respect to one or more Guarantors
without seeking to enforce the same as to all or any Guarantors. If one or more
additional guaranty agreements ("Other Guaranties") are executed by one or more
additional guarantors ("Other Guarantors"), which guarantee, in whole or in
part, any of the Obligations, it is specifically agreed that Administrative
Agent may enforce the provisions of this Guaranty or of the Other Guaranties
with respect to one or more of the Guarantors or any one or more of the Other
Guarantors under the Other Guaranties without seeking to enforce the provisions
of this Guaranty or the Other Guaranties as to all or any of the Guarantors or
the Other Guarantors. Each Guarantor hereby waives any requirement of joinder of
all or any other Guarantor or all or any of the Other Guarantors in any suit or
proceeding to enforce the provisions of this Guaranty or of the Other
Guaranties. The liability hereunder of all Guarantors hereunder shall be joint
and several.

 

20.       Additional Guarantors. From time to time subsequent to the date
hereof, additional Persons may become parties hereto as additional Guarantors
(each, an "Additional Guarantor"), by executing a joinder agreement in the form
of Exhibit A hereto (each, a "Joinder Agreement"). Upon delivery of any such
Joinder Agreement to Administrative Agent, notice of which is hereby waived by
Guarantors, each Additional Guarantor shall be a Guarantor and shall be as fully
a party hereto as if Additional Guarantor were an original signatory hereto.
Each Guarantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Guarantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Borrower to become an Additional Guarantor hereunder. This
Guaranty shall be fully effective as to any Guarantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Guarantor hereunder.

 

UNCONDITIONAL GUARANTY – Page 8 

 

 

21.       Maximum Liability. Anything in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable Law (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor in respect of intercompany indebtedness to other Obligated Parties or
Affiliates of other Obligated Parties to the extent that such indebtedness would
be discharged in an amount equal to the amount paid or property conveyed by such
Guarantor under the Loan Documents) and after giving effect as assets, subject
to Section 7, to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation or contribution of such
Guarantor pursuant to (a) applicable Law or (b) any agreement providing for an
equitable allocation among such Guarantor and other Obligated Parties of
obligations arising under the Loan Documents and Bank Product Agreements.

 

22.       ENTIRE AGREEMENT. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

UNCONDITIONAL GUARANTY – Page 9 

 

 

IN WITNESS WHEREOF, Guarantors, intending to be jointly and severally legally
bound hereby, have executed this Guaranty as of the date and year first above
written.

 

  NYTIS EXPLORATION COMPANY LLC       By: Nytis Exploration (USA) Inc.,     its
sole Manager

 

  By:       Patrick R. McDonald     Chief Executive Officer

 

  Address:       2480 Fortune Drive, Suite 300   Lexington, Kentucky  40509

 

  NYTIS EXPLORATION (USA) INC.         By:       Patrick R. McDonald     Chief
Executive Officer

 

  Address:       1700 Broadway, Suite 1170   Denver, Colorado  80290

 

 

 UNCONDITIONAL GUARANTY – Signature Page

 

 

 

 

EXHIBIT A

 

Form of Guaranty Joinder Agreement

 

JOINDER AGREEMENT

 

THIS JOINDER AGREEMENT (this "Joinder Agreement") is entered into as of
______________, 20___, by the undersigned ("Additional Guarantor"), in favor of
LEGACYTEXAS BANK, for the benefit of the Guaranteed Parties (in such capacity,
"Administrative Agent").

 

WHEREAS, CARBON NATURAL GAS COMPANY, a Delaware corporation ("Borrower"),
Administrative Agent and the Lenders party thereto have entered into that
certain Credit Agreement dated as of October 3, 2016 (as the same has been or
may be amended, restated or modified from time to time, the "Credit Agreement");
and

 

WHEREAS, pursuant to the Credit Agreement, certain Subsidiaries of Borrower
entered into that certain Unconditional Guaranty dated as of October 3, 2016 (as
the same has been or may be amended, restated or modified from time to time, the
"Guaranty") in favor of Administrative Agent for the benefit of the Guaranteed
Parties, in order to, among other things, induce the Guaranteed Parties to make
the loans and other financial accommodations provided for in the Credit
Agreement and Bank Product Agreements; and

 

WHEREAS, Additional Guarantor is a Subsidiary of Borrower, and Additional
Guarantor desires that the Lenders extend credit to Borrower as contemplated by
the Credit Agreement, and Additional Guarantor will directly or indirectly
benefit from the use of the loan proceeds by Borrower for the purposes for which
the credit is being extended pursuant to the Credit Agreement; and

 

WHEREAS, Additional Guarantor, by and through the action of its governing body,
has determined that it may reasonably be expected to benefit, directly or
indirectly, from guarantying the Obligations (as defined in the Credit
Agreement), all as provided therein;

 

ACCORDINGLY, Additional Guarantor hereby agrees with Administrative Agent as
follows:

 

1.          Definitions. All capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Guaranty.

 

2.          Party to Guaranty. Additional Guarantor hereby acknowledges, agrees
and confirms that, by its execution of this Joinder Agreement, Additional
Guarantor will be deemed to be a party to the Guaranty and a "Guarantor" for all
purposes of the Guaranty, and shall have all of the obligations of a Guarantor
thereunder as if it had executed the Guaranty. Additional Guarantor hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions applicable to Guarantors contained in the Guaranty.
Without limiting the generality of the foregoing terms of this Section 2,
Additional Guarantor hereby, jointly and severally with the other Guarantors,
unconditionally, absolutely and irrevocably guarantees to the Guaranteed
Parties, as provided in the Guaranty, the due and punctual payment at maturity,
whether by acceleration or otherwise, and the due fulfillment and performance of
the Obligations. Additional Guarantor is jointly and severally liable for the
full payment and performance of the Obligations as a primary obligor.

 

3.          Address for Notice Purposes. The address of Additional Guarantor for
purposes of all notices and other communications is set forth on the signature
page hereof.

 

 

EXHIBIT A – Form of Guaranty Joinder Agreement – Page 1

 

 

 

 

4.          Waiver of Acceptance. Additional Guarantor hereby waives acceptance
by Administrative Agent and the Guaranteed Parties of the guaranty by Additional
Guarantor under the Guaranty upon the execution of this Joinder Agreement by
Additional Guarantor.

 

5.          Representations and Warranties. Additional Guarantor hereby
represents and confirms that the representations and warranties set forth in the
Guaranty and in the Credit Agreement which are applicable to Guarantors are true
and correct with respect to Additional Guarantor on and as of the date hereof
(and after giving effect hereto), as if set forth herein in their entirety.

 

6.          Severability. Any provision of this Joinder Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Joinder Agreement and the effect thereof
shall be confined to the provision held to be invalid or illegal.

 

7.          Counterparts. This Joinder Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Joinder Agreement
shall become effective when it shall have been executed by Administrative Agent
and when Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Joinder
Agreement by facsimile or other electronic imaging means (e.g. "pdf" or "tif")
shall be effective as delivery of a manually executed counterpart of this
Joinder Agreement.

 

8.          Governing Law. This Joinder Agreement and any claims, controversy,
dispute or cause of action (whether in contract or tort or otherwise) based
upon, arising out of or relating to this Joinder Agreement and the transactions
contemplated hereby and thereby shall be governed by, and construed in
accordance with, the law of the State of Texas (without reference to applicable
rules of conflicts of laws).

 

9.          Loan Document. This Joinder Agreement is a Loan Document for all
purposes and each reference in any Loan Document to the Guaranty shall mean the
Guaranty as supplemented by this Joinder Agreement.

 

10.        ENTIRE AGREEMENT. THIS JOINDER AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND 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.

 

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

 

EXHIBIT A – Form of Guaranty Joinder Agreement – Page 2

 

 

 

  

IN WITNESS WHEREOF, the undersigned Additional Guarantor and Administrative
Agent have executed this Joinder Agreement as of the date first above written.

 

  ADDITIONAL GUARANTOR:         By:               Name:     Title:  

 

  Address:                       Facsimile:  

 

 

EXHIBIT A – Form of Guaranty Joinder Agreement – Signature Page 

 

 

 

 

 

ACCEPTED BY:

LEGACYTEXAS BANK, as Administrative Agent

        By:                 Name:     Title:  

 

 

EXHIBIT A – Form of Guaranty Joinder Agreement – Signature Page