Document:

Exhibit 10.1

ESCROW AGREEMENT

This AGREEMENT, dated as of March __, 2017 (together with Schedule A and Schedule B hereto, this “Agreement”), is by and among Energy Resources 12, L.P., a Delaware limited partnership, with principal offices located at 120 West 3rd Street, Suite 220, Ft. Worth, Texas (the “Company”); Branch Banking and Trust Company, a North Carolina banking corporation, with principal offices located at 223 West Nash Street, Wilson, North Carolina 27893 (“Escrow Agent”); and David Lerner Associates, Inc., a New York corporation, with principal offices located at 477 Jericho Turnpike, Syosset, New York 11791 (the “Dealer Manager”).

WHEREAS, the Company has engaged the Dealer Manager to sell (the “Financing”) up to 17,631,579 common units of limited partner interest (“Common Units”) in the Company (“Maximum Amount”), with a minimum investment of $5,000 in Units at a price of $19.00 per Common Unit, until 2,631,579 Common Units are sold ($50,000,001) and thereafter at a price of $20.00 per Common Unit, on a best efforts basis, pursuant to a Registration Statement on Form S-1 File No. 377-01491 filed with the Securities and Exchange Commission (“SEC”) which includes a prospectus, as supplemented and amended from time to time (the “Offering Document”);

WHEREAS, the Common Units are being offered to persons who meet the suitability requirements described in the Offering Document (“Purchasers”); and

WHEREAS, proceeds received from subscriptions for the Common Units shall be held in escrow by Escrow Agent pending a Closing (as defined below).

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:

	
1.

	
Definitions.  The following terms shall have the meanings indicated or referred to below, inclusive of their singular and plural forms, except where the context requires otherwise.  Unless the context requires otherwise, all references to “years,” “months,” or “days” shall mean “calendar years,” “calendar months,” and “calendar days.”  References in this Agreement to “including” shall mean “including, without limitation,” whether or not so specified.  Any term not defined below which is initially capitalized in this Agreement shall have the meaning ascribed to it in this Agreement.

“Affiliate” means, with respect to any person, (a) a person which directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with such person, (b) any person of which such person is the beneficial owner of a twenty-five percent (25%) or greater interest, or (c) any person which acquires all or substantially all of the assets of such person.  A person is deemed to control another person if such person, directly or indirectly, has the power to direct the management, operations or business of such person.  The term “beneficial owner” is to be determined 

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in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

“Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

“Cash Investment” shall mean the funds received from a Purchaser for its subscription of Common Units. Cash Investment shall not include any interest or other earnings thereon.

“Cash Investment Instrument” shall mean a check made payable to “Branch Banking and Trust Company, as escrow agent for Energy Resources 12” representing a Purchaser’s subscription proceeds for Common Units.

“Closing” shall mean the closing conducted by the Company and the Dealer Manager with respect to the sale of the Minimum Amount (as defined below) of Common Units.

“Escrow Funds” shall mean the funds deposited with Escrow Agent pursuant to Section 3 of this Agreement.

“Joint Written Direction” shall mean a written direction executed and delivered by the Company and the Dealer Manager, directing the Escrow Agent to disburse all or a portion of the Escrow Funds or otherwise directing any party hereto to take or refrain from taking an action pursuant to this Agreement.  Any Joint Written Direction relating to a disbursement of Escrow Funds shall certify with reasonable detail satisfactory to Escrow Agent in its sole discretion (i) that the Company has received and accepted subscription agreements (and the accompanying payments have been deposited in the Escrow Funds and have cleared) equal to the Minimum Amount and (ii) its instructions as to the payment of the subscription proceeds.  Each Joint Written Direction shall be accompanied by the documents set forth in Schedule B hereto.

“Minimum Amount” shall mean $25 million, representing the sale of 1,315,790 Common Units.

“Subscription Accounting” shall mean an accounting for all subscriptions for Common Units received and accepted by the Company as of the date of such accounting, indicating for each subscription the Purchaser’s name, social security number and current address, the number and total purchase price of the subscribed Common Units, the date of receipt by the Dealer Manager of the Cash Investment Instrument, and notations of any nonpayment of the Cash Investment Instrument submitted with such subscription, any other information required for withholding purposes, any withdrawal of such subscription by the Purchaser, any rejection of such subscription by the Company, or other termination, for whatever reason, of such subscription.

“Termination Date” shall mean the date on which the Minimum Amount of Common Units have been sold or March __, 2019, whichever event occurs first.

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2.

	
Appointment of Escrow Agent.  The Company and the Dealer Manager hereby appoint Escrow Agent as escrow agent in accordance with the terms and conditions set forth herein, and Escrow Agent hereby accepts such appointment.

	
3.

	
Delivery of Subscription Proceeds.  All valid Cash Investment Instruments received from Purchasers as payment for the Common Units will be delivered by the Dealer Manager to the Escrow Agent (i) by the end of the next business day following receipt of the subscription and the related Cash Investment Instruments at the office of the Dealer Manager where internal supervisory review is conducted and, (ii) if received at any offsite branch office of the Dealer Manager which does not perform internal supervisory review, by the end of the second business day following receipt at such branch office of the Dealer Manager, in each case to be held in escrow in accordance with Section 5 below.  All non-conforming Cash Investment Instruments received from a Purchaser shall be returned by the Dealer Manager to such Purchaser not later than the end of the next Business Day following its receipt.  The Escrow Agent is hereby empowered on behalf of the Company to endorse and collect in the banking system all checks received on account of Purchases of the Common Units.

	
4.

	
With each transmittal of a Cash Investment Instrument to the Escrow Agent, the Dealer Manager shall provide the following documents to the Escrow Agent:

	
(1)

	
A Subscription Accounting;

	
(2)

	
Instructions, if any, regarding the investment of such deposited funds in accordance with Section 7 hereof; and

	
(3)

	
A copy of the executed subscription agreement or copy of the signature page of such agreement.

The Escrow Agent is under no obligation to accept deposits from anyone other than the Dealer Manager.  If a deposit is received by 12:00 P.M. Eastern time on a given Business Day, it will be accepted that Business Day; otherwise it will be accepted on or as of the next Business Day.

ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE PURCHASERS ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT BE SUBJECT TO ANY LIEN OR CHARGE BY ESCROW AGENT OR BY JUDGMENT OR CREDITORS’ CLAIM AGAINST THE COMPANY OR ESCROW AGENT UNTIL RELEASED TO THE COMPANY IN ACCORDANCE WITH THIS AGREEMENT.

	
5.

	
Escrow Agent to Hold and Disburse Funds.  The Escrow Agent will hold all Escrow Funds in a segregated non-interest bearing account titled in the name of Escrow Agent and established for the benefit of the Purchasers and the Company and disburse all Escrow Funds as follows:

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(a)

	
If, prior to the Termination Date, the Escrow Agent has received Escrow Funds equal to or greater than the Minimum Amount the Escrow Agent shall, pursuant to a Joint Written Direction, pay such Escrow Funds to the Company within three (3) Business Days of receipt of such Joint Written Direction.

	
(b)

	
(i) If the Closing has not taken place by the Termination Date or (ii) if the Company and the Dealer Manager by a Joint Written Direction notify the Escrow Agent in writing at any earlier time that no Closing will take place, the Escrow Agent shall, within five (5) Business Days after the Termination Date or receipt of such Joint Written Direction (as the case may be), without any further instruction from the Company or Dealer Manager, return to each Purchaser such Purchaser’s Cash Investment.

	
           (c)

	
Notwithstanding anything to the contrary contained herein, if the Escrow Agent has not received Cash Investments at least equaling the Minimum Amount by the Termination Date, the Escrow Agent shall within five (5) Business Days after the Termination Date, without any further instruction from the Company or Dealer Manager, return to each Purchaser such Purchaser’s Cash Investment.

	
(d)

	
If any amount of Escrow Funds was returned to Escrow Agent as undeliverable following the operation of Section 5(a), Section 5(b) and Section 5(c) above, Escrow Agent, in addition to its other rights herein, (x) (A) may maintain and manage such Escrow Funds for such period of time as it determines may be necessary or appropriate, including in accordance with applicable state escheatment and unclaimed property laws, as determined by Escrow Agent in its sole discretion and (B) shall have the right to escheat any such Escrow Funds pursuant to applicable state escheatment and unclaimed property laws and (y) may take any other action permitted by this Agreement, including Section 6, Section 8 and Section 11 hereof.

	
          (e)

	
No later than five (5) Business Days after receipt by Escrow Agent of written notice (i) from the Company or the Dealer Manager that the Company intends to reject a Purchaser’s subscription, (ii) that a Purchaser has revoked his or her subscription, or (iii) from the SEC or any other federal or state regulatory authority that a stop order has been issued with respect to the Offering Document and has remained in effect for at least twenty (20) days, Escrow Agent will, without any further instruction from the Company or Dealer Manager, transmit to the Purchaser or Purchasers that portion of the Escrow Funds attributable to such Purchaser or Purchasers affected by such event, or equal to the amount of the reduction in a subscription, as the case may be.

All disbursements of Escrow Funds in Section 5(a) above to the Company shall be subject to the fees, costs, expenses and other amounts due to Escrow Agent and any other Indemnified Party (as defined below) hereunder.

Any payments by the Escrow Agent to a Purchaser pursuant to the terms of this Agreement shall be made by check payable to the order of such Purchaser.

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6.

	
Suspension of Performance; Disbursement into Court.  If, at any time, (i) there shall exist any dispute between or among the Company and the Dealer Manager  with respect to the holding or disposition of all or any portion of the Escrow Funds or any other obligations of Escrow Agent hereunder, (ii) Escrow Agent is unable to determine, to Escrow Agent’s sole satisfaction, the proper disposition of all or any portion of the Escrow Funds or Escrow Agent’s proper actions with respect to its obligations hereunder, or (iii) the Company has not, within thirty (30) days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 8 hereof, appointed a successor escrow agent to act hereunder (which such successor escrow agent has accepted such appointment), then Escrow Agent may, in its sole discretion, take either or both of the following actions:

	
(a)

	
suspend the performance of any of its obligations (including any disbursement obligations) under this Agreement until such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until a successor escrow agent shall have been appointed (as the case may be); and/or

	
(b)

	
petition (by means of an interpleader action or any other appropriate method) any court of competent jurisdiction in New York City, for instructions with respect to such dispute or uncertainty, and to the extent required or permitted by law, pay into such court, for holding and disposition in accordance with the instructions of such court, all Escrow Funds.

Escrow Agent shall have no liability to the Company or the Dealer Manager, or to their respective shareholders, partners, or members, officers or directors, employees, Affiliates or any other person with respect to any such suspension of performance or disbursement into court (including any disbursement obligations hereunder), specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of Escrow Funds or any delay in or with respect to any other action required or requested of Escrow Agent.

	
7.

	
Funds.  Escrow Agent shall invest and reinvest the Escrow Funds in the BB&T Non-interest bearing deposit account, type 101; provided, however, if the BB&T Non-interest bearing deposit account, type 101 no longer satisfies the requirements of SEC Rule 15c2-4, as further explained in NASD Notice to Members 84-7, the Escrow Agent shall invest and reinvest the Escrow Funds as directed by the Company in investments that satisfy the requirements of SEC Rule 15c2-4, as further explained in NASD Notice to Members 84-7, including the following:

	
(a)

	
bank accounts, including savings accounts and bank money market accounts (as bank is defined in Section 3(a)(6) of the Exchange Act) (including bank money market accounts managed by Escrow Agent and its affiliates);

	
(b)

	
Short-term direct obligations of the United States of America or obligations the principal of and the interest on which are unconditionally guaranteed by the United States of America; or

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(c)

	
Short-term certificates of deposit issued by any bank (as defined in Section 3(a)(6) of the Exchange Act) (including Escrow Agent and its affiliates) located in the United States and having a net worth of at least $50,000,000.

Each of the foregoing investments shall be made in the name of Escrow Agent in its stated capacity as escrow agent. No investment shall be made in any instrument or security that has a maturity of greater than three (3) months. Notwithstanding anything to the contrary contained herein, Escrow Agent may, without notice to Company or Dealer Manager, sell or liquidate any of the foregoing investments at any time if the proceeds thereof are required for any release of funds permitted or required hereunder, and Escrow Agent shall not be liable or responsible for any loss, cost or penalty resulting from any such sale or liquidation. With respect to any funds received by Escrow Agent for deposit into the Escrow Funds or any written investment instruction of Company received by Escrow Agent after ten o’clock, a.m., Eastern time, Escrow Agent shall not be required to invest such funds or to effect such investment instruction until the next Business Day.

The Escrow Agent shall provide to the Company and the Dealer Manager (i) upon request by Company or Dealer Manager, an accounting of all funds held in escrow pursuant to this Agreement, to the extent such funds have not been previously paid over by Escrow Agent, and (ii) monthly statements identifying transactions, transfers or holdings of Escrow Funds and each such statement shall be deemed to be correct and final upon receipt thereof by the Company and the Dealer Manager unless the Escrow Agent is notified in writing, by the Company and the Dealer Manager, to the contrary within thirty (30) business days of the date of such statement.

	
8.

	
Termination of Agreement; Resignation of Agent.  Upon the first to occur of (i) the disbursement of all amounts of the Escrow Funds in accordance with this Agreement (including Section 5(d) and the operation of applicable state escheatment and unclaimed property laws) or (ii) the resignation of Escrow Agent, Escrow Agent shall be released from its obligations hereunder and Escrow Agent shall have no further obligation or liability whatsoever with respect to this Agreement or the Escrow Funds, but shall not be discharged from any actions taken as Escrow Agent prior to the earlier to occur of paragraph (i) or (ii).  The obligations of the Company continue to exist notwithstanding the termination or discharge of Escrow Agent’s obligations or liabilities hereunder until the obligations of the Company have been fully performed.

Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent hereunder by giving the Company and the Dealer Manager at least ten (10) days’ notice thereof and the Company and the Dealer Manager may remove the Escrow Agent by giving a Joint Written Direction at least ten days’ prior to such removal.  Such registration or removal shall be effective upon the appointment of a successor Escrow Agent as provided herein.  Upon any such notice of resignation, the Company and the Dealer Manager shall jointly issue to Escrow Agent a Joint Written Direction authorizing redelivery of the Escrow Funds to a depository that has been retained as successor to Escrow Agent hereunder prior to the effective date of such resignation.  As soon as practicable after its resignation, Escrow Agent shall turn over to such successor escrow

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agent all monies and property held hereunder upon presentation of the document appointing the new escrow agent and such escrow agent’s acceptance thereof.

After any retiring Escrow Agent’s resignation, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Escrow Agent under this Agreement.  Any corporation or other entity into which Escrow Agent may be merged or converted or with which it may be merged or consolidated, or any other entity to which all or a majority of all of Escrow Agent’s escrow business may be transferred by sale of assets or otherwise, shall be Escrow Agent under this Agreement without further act or consent of any party hereto.

	
9.

	
Liability of Escrow Agent.

	
(a)

	
Escrow Agent shall have no duties or responsibilities other than the ministerial duties as expressly set forth herein and no other duties and obligations shall be implied (fiduciary or otherwise).  Escrow Agent shall have no duty to enforce any obligation of any person to make any payment or delivery, or to direct or cause any payment or delivery to be made, or to enforce any obligation of any person to perform any other act.  Escrow Agent shall be under no liability to the other parties hereto or to anyone else by reason of any failure on the part of any party hereto or any maker, guarantor, endorser or other signatory of any document or any other person to perform such person’s obligations under any such document.  Except for amendments to this Agreement referred to below, and except for instructions given to Escrow Agent pursuant to a Joint Written Direction, Escrow Agent shall not be obligated to recognize any agreement between any and all of the persons referred to herein, notwithstanding that references thereto may be made herein and whether or not it has knowledge thereof.  In the event of any conflict between the terms and provisions of this Agreement and any other agreement, as to Escrow Agent, the terms and conditions of this Agreement shall control subject to Section 29 hereof.

	
(b)

	
Escrow Agent shall not be liable to the Company or the Dealer Manager or to anyone else for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that Escrow Agent’s gross negligence or willful misconduct was the primary cause of any loss to the Company or the Dealer Manager.  In no event shall Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages of any kind whatsoever (including lost profits), even if Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. The officers, directors, members, partners, trustees, employees, agents, attorneys or other representatives and Affiliates of Escrow Agent owe no duty or obligation to any party hereunder and shall have no liability to any person by reason of any error of judgment, for any act done or not done, for any mistake of fact or law, or otherwise.  Escrow Agent may rely conclusively, and shall be protected in acting, upon any order, notice, instruction (including a Joint Written Direction), request, demand, certificate, opinion or advice of counsel (including counsel chosen by Escrow Agent), statement, instrument, report or other paper or document (not

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only as to its due execution and the validity (including the authority of the person signing or presenting the same) and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained), which is believed by Escrow Agent to be genuine and to be signed or presented by the proper person or persons.  Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement or any of the terms thereof, unless evidenced by a writing delivered to Escrow Agent signed by the proper party or parties and, if the duties or rights of Escrow Agent are affected, unless it shall give its prior written consent thereto.

	
(c)

	
Escrow Agent shall not be obligated to take any legal or other action or commence any proceeding in connection with the Escrow Funds, any account in which Escrow Funds are deposited, this Agreement or any other agreement, or to appear in, prosecute or defend any such legal action or proceeding (whether or not it shall have been furnished with acceptable indemnification and advancement).  Escrow Agent may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, or relating to any dispute or question involving any party hereto, and shall incur no liability and shall be fully indemnified from any liability whatsoever in acting in accordance with the opinion or instruction of such counsel.  The Company shall promptly pay, upon demand, the reasonable fees, costs and expenses of any such counsel.

	
(d)

	
Escrow Agent shall not be responsible for the sufficiency or accuracy of the form of, or the execution, validity, value or genuineness of, any document or property received, held or delivered by it hereunder, or of any signature or endorsement thereon, or for any lack of endorsement thereon, or for any description therein; nor shall Escrow Agent be responsible or liable to the other parties hereto or to anyone else in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any document or property or this Agreement.  Escrow Agent shall have no responsibility with respect to the use or application of any Escrow Funds paid by Escrow Agent pursuant to the provisions hereof.  Escrow Agent shall have no duty to solicit any payment which may be due to be paid in Escrow Funds or to confirm or verify the accuracy or correctness of any amounts delivered in accordance with this Agreement or the calculation of the Minimum Amount or the Maximum Amount in respect to the Escrow Funds.  Escrow Agent shall not be liable to the Company or to anyone else for any loss which may be incurred by reason of any investment of any monies which it holds hereunder.

	
(e)

	
Escrow Agent shall have the right to assume in the absence of written notice to the contrary from the proper person or persons that a fact or an event by reason of which an action would or might be taken by Escrow Agent does not exist or has not occurred, without incurring liability to the other parties hereto or to anyone else for any action taken or omitted, or any action suffered by it to be taken or omitted, in good faith, in reliance upon such assumption.

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(f)

	
Escrow Agent is authorized, in its sole discretion, to comply with orders issued or process entered by any court with respect to the Escrow Funds, without determination by Escrow Agent of such court’s jurisdiction in the matter.  If any portion of the Escrow Funds is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it is binding upon it without the need for appeal or other action; and if Escrow Agent complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.

	
10.

	
Indemnification of Escrow Agent.  From and at all times after the date of this Agreement, the Company shall, to the fullest extent permitted by law, defend, indemnify and hold harmless Escrow Agent and each director, officer, member, partner, trustee, employee, attorney, agent and Affiliate of Escrow Agent (collectively, the “Indemnified Parties”) against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs, penalties, settlements, judgments and expenses of any kind or nature whatsoever (including costs and expenses and reasonable attorneys’ fees) incurred by or asserted against any of the Indemnified Parties from and after the date hereof, whether direct, indirect or consequential, as a result of, in connection with, or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including the Company and/or the Dealer Manager, whether threatened or initiated, asserting a claim for any legal or equitable remedy against any person (whether it is an Indemnified Party or not) under any statute or regulation, including any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Agreement or any transactions contemplated herein or relating hereto (including tax reporting or withholding or the enforcement of any rights or remedies under or in connection with this Agreement), whether or not any such Indemnified Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation (without derogation of any other indemnity afforded to Escrow Agent); provided, however, that no Indemnified Party shall have the right to be indemnified hereunder for any liability finally determined by a court of competent jurisdiction, subject to no further appeal, to have resulted solely from the gross negligence or willful misconduct of such Indemnified Party.  If any such action or claim shall be brought or asserted against any Indemnified Party, such Indemnified Party shall promptly notify Company in writing, and Company shall assume the defense thereof, including the employment of counsel and the payment of all expenses. Such Indemnified Party shall, in its sole discretion, have the right to employ separate counsel in any such action and to participate in the defense thereof, and the fees and expenses of such counsel shall be paid by such Indemnified Party unless (a) Company agrees to pay such fees and expenses, or (b) Company shall fail to assume the defense of such action or

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proceeding or shall fail, in the reasonable discretion of such Indemnified Party, to employ counsel satisfactory to the Indemnified Party in any such action or proceeding, or (c) the named parties to any such action or proceeding (including any impleaded parties) include both Indemnified Party and Company, and Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to Company.

	
11.

	
Fees, Costs and Expenses of Escrow Agent.  The Company shall compensate Escrow Agent for its services hereunder in accordance with Schedule A attached hereto and, in addition, shall reimburse Escrow Agent for all of its reasonable and necessary out-of-pocket costs and expenses, including attorneys’ fees, travel expenses, telephone and facsimile transmission costs, postage (including express mail and overnight delivery charges), copying charges and the like.  The additional provisions and information set forth on Schedule A hereto are hereby incorporated by this reference, and form a part of this Agreement.  All of the compensation and reimbursement obligations set forth in this Section 11 shall be payable by the Company upon execution of this Agreement and, in the future, upon demand by Escrow Agent.  Escrow Agent is authorized to and may disburse from time to time, to itself or to any Indemnified Party from the Escrow Funds (but only to the extent of Company’s rights thereto), the amount of any compensation and reimbursement of out-of-pocket expenses due and payable hereunder (including any amount to which Escrow Agent or any Indemnified Party is entitled to seek indemnification pursuant to Section 9 hereof, but only to the extent of Company’s rights thereto).  Escrow Agent shall notify the Company of any disbursement from the Escrow Funds to itself or any other Indemnified Party in respect of any compensation or reimbursement hereunder and shall furnish to the Company copies of all related invoices and other statements.

	
12.

	
Representations and Warranties.  Each of the Company and the Dealer Manager severally covenants and makes the following representations and warranties to Escrow Agent:

	
(a)

	
It is duly organized, validly existing, and in good standing under the laws of the state of its incorporation or organization, and has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

	
(b)

	
This Agreement has been duly approved by all necessary action, including any necessary shareholder or membership approval, has been executed by its duly authorized officers, and constitutes its valid and binding agreement enforceable in accordance with its terms.

	
(c)

	
The execution, delivery, and performance of this Agreement is in accordance with the agreements related to the Financing and will not violate, conflict with, or cause a default under its articles of incorporation, bylaws, management agreement or other organizational document, as applicable, any applicable law, rule or regulation, any court order or administrative ruling or decree to which it is a party or any of its property is subject, or any agreement, contract, indenture, or other binding arrangement, including the agreements related to the Financing, to which it is a party or any of its property is subject.

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(d)

	
Escrow Agent is appointed to act as agent only for the limited purposes set forth in this Agreement; no representation, statement, communication or other suggestion shall be made that Escrow Agent has investigated the desirability or advisability of investment in the Common Units or has approved, endorsed or passed upon the merits of purchasing the  Common Units; and the name of Escrow Agent has not and shall not be used in any manner in connection with the offering of the Common Units other than to state that Escrow Agent has agreed to serve as escrow agent for the limited purposes set forth in this Agreement.

	
(e)

	
No party other than the parties hereto has, or shall have, any lien, claim or security interest in the Escrow Funds or any part thereof.  No financing statement under the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in or describing (whether specifically or generally) the Escrow Funds or any part thereof.

	
(f)

	
It possesses such valid and current licenses, certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct its respective businesses, and it has not received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such license, certificate, authorization or permit.

	
(g)

	
All of its representations and warranties contained herein are true and complete as of the date hereof and will be true and complete at the time of any disbursement of Escrow Funds.

	
13.

	
Patriot Act Disclosure.  The Company acknowledges that a portion of the identifying information provided to Escrow Agent pursuant to Section 4 hereof is being requested in connection with the USA Patriot Act, Pub.L.107-56 (the “Act”), and the Company agrees to provide any additional information requested by Escrow Agent in connection with the Act or any similar law, rule, regulation, order, or other governmental act to which Escrow Agent is subject, in a timely manner and consent to Escrow Agent obtaining from third parties any such identifying information. The Company represents that all identifying information set forth on Schedule A hereto, including its Taxpayer Identification Number assigned by the Internal Revenue Service or any other taxing authority, is true and complete on the date hereof and will be true and complete at the time of any disbursement of Escrow Funds. For a non-individual person such as a charity, a trust, or other legal entity, Escrow Agent may require documentation to verify formation and existence as a legal entity.  Escrow Agent may also require financial statements, licenses, identification and authorization documentation from any individual claiming authority to represent the entity or other relevant documentation.

	
14.

	
Consent to Jurisdiction and Venue. In the event that any party hereto commences a lawsuit or other proceeding relating to or arising from this Agreement, the parties hereto agree that the United States District Court for the Southern District of the State of New York shall have the sole and exclusive jurisdiction over any such proceeding.  If such court lacks federal subject matter jurisdiction, the parties hereto agree that the Supreme Court of the State of New York within New York County shall have sole and exclusive

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jurisdiction.  Any final judgment shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Any of these courts shall be proper venue for any such lawsuit or judicial proceeding and the parties hereto waive any objection to such venue and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum.

The parties hereto consent to and agree to submit to the jurisdiction of any of the courts specified herein and agree to accept service of process to vest personal jurisdiction over them in any of these courts.

Each party hereto irrevocably and unconditionally waives any right to a trial by jury and agrees that any of them may file a copy of this section of this Agreement with any court as written evidence of the knowing, voluntary and bargained-for agreement among the parties hereto irrevocably to waive the right to trial by jury in any litigation related to or arising under this Agreement.

	
15.

	
Notice.  All notices, instructions (pursuant to a Joint Written Direction or otherwise), approvals, consents, requests, and other communications hereunder shall be in writing and shall be deemed to have been given (a) when such writing is delivered by hand or overnight delivery service, or (b) upon telephone call-back in accordance with Section 16 below, after being sent by e-mail with PDF attachment from the designated e-mail account(s) of the sending person(s) as designated on Schedule A hereto to the designated e-mail account(s) of the receiving person(s) as designated on Schedule A hereto or (c) three (3) Business Days after being mailed by first class mail (postage prepaid), in each case to the address set forth on Schedule A hereto or to such other address as each party hereto may designate for itself by like notice.

	
16.

	
Security Procedures.  If notices, instructions (pursuant to a Joint Written Direction or otherwise), approvals, consents, requests, and other communications, are received by the Escrow Agent by e-mail at its e-mail account(s) as designated on Schedule A hereto, the Escrow Agent is authorized, but not required, to seek prompt confirmation of such communications by telephone call-back to the sending person or persons’ telephone number(s) as designated on Schedule A hereto, and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated in that call-back.  Any e-mail by PDF attachment executed by more than one person shall be sent by each signatory.  The persons and their telephone numbers authorized to receive call-backs as designated in Schedule A hereto may be changed only in a writing actually received and acknowledged by the Escrow Agent and delivered in accordance with Section 15 hereof and, if applicable, this Section 16.  If Escrow Agent is unable to contact any such designated person, Escrow Agent is hereby authorized (but not required) both to receive written instructions from and seek confirmation of such instructions by telephone call-back to any one or more of the Company’s or the Dealer Manager’s executive officers (each, an “Executive Officer”), as the case may be, who shall include individuals holding titles of Manager of the Company’s general partner (for the Company) or Senior Vice President for the Dealer Manager, or in each case more senior thereto, as Escrow Agent may select.  Such Executive Officer(s) shall deliver to Escrow Agent a fully executed

12

incumbency certificate upon Escrow Agent’s request, and Escrow Agent may rely upon the confirmation of anyone purporting to be any such Executive Officer(s). The parties to this Agreement acknowledge and agree that the security procedures set forth above are commercially reasonable.

The Escrow Agent in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by the Company to identify (i) a beneficiary, (ii) a beneficiary’s bank, or (iii) an intermediary bank.  The Escrow Agent may apply any of the Escrow Funds for any payment order it executes using any such identifying number, even where its use may result in a person other than a beneficiary being paid, or the transfer of funds to a bank other than a beneficiary’s bank or an intermediary bank designated.

	
17.

	
Amendment or Waiver.  This Agreement may be changed, waived, discharged or terminated only by a writing signed by the parties hereto.  No delay or omission by any party hereto in exercising any right with respect hereto shall operate as a waiver.  A waiver on any one occasion shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion.

	
18.

	
Severability.  To the extent any provision of this Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

	
19.

	
Governing Law.  This Agreement shall be construed and interpreted in accordance with the internal laws of the State of New York without giving effect to the conflict of laws principles thereof.

	
20.

	
Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto relating to the holding, investment and disbursement of Escrow Funds and sets forth in their entirety the obligations and duties of Escrow Agent with respect to the Escrow Funds.

	
21.

	
Binding Effect.  All of the terms of this Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of the Company, Escrow Agent and the Dealer Manager.

	
22.

	
Execution in Counterparts.  This Agreement and any Joint Written Direction may be executed in two or more counterparts, which when so executed shall constitute one and the same agreement or direction.  Subject to Section 15 and Section 16 hereof, this Agreement and any Joint Written Direction may be executed and delivered by e-mailing a PDF version of a signed signature page, which shall have the same force and effect as the delivery of an originally executed signature page.

	
23.

	
Dealings.  Escrow Agent and any stockholder, director, officer or employee of Escrow Agent may buy, sell, and deal in any of the securities of the Company and become pecuniarily interested in any transaction in which the Company may be interested, and contract and lend money to the Company and otherwise act as fully and freely as though

13

it were not Escrow Agent under this Agreement.  Nothing herein shall preclude Escrow Agent from acting in any other capacity for the Company or for any other entity.

	
24.

	
Currency.  The currency applicable to any amount payable or receivable under this Agreement is United States dollars.

	
25.

	
[Reserved].

	
26.

	
Force Majeure.  Notwithstanding anything to the contrary hereunder, Escrow Agent shall not be liable for any delay, failure to perform, or other act or non-act resulting from acts beyond its reasonable control, including acts of God, terrorism, shortage of supply, labor difficulties (including strikes), war, civil unrest, fire, floods, electrical outages, equipment or transmission failures, internet interruption, vendor failures (including information technology providers), and other similar causes.

	
27.

	
No Third Party Beneficiaries.  This Agreement and all of its terms and conditions are for the sole and exclusive benefit of the parties hereto and their respective permitted successors and assigns.  Nothing expressed or referred to in this Agreement will be construed to give any person or entity other than the parties to this Agreement any legal or equitable rights, remedy, or claim under or with respect to this Agreement or any term or condition of this Agreement.

	
28.

	
No Strict Construction.  The parties hereto have participated jointly in the negotiation and draft of this Agreement.  In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if it were drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of authorship of any provision of this Agreement.

	
29.

	
Priority.

	
(a)

	
In the event of any conflict between the provisions of Schedule A or Schedule B hereto and the remainder of this Agreement, this Agreement shall be construed in a manner prescribed by Escrow Agent acting in good faith.

	
(b)

	
Nothing contained in this Agreement shall amend, replace or supersede any agreement between the Company and Escrow Agent to act as the Company’s transfer agent, which agreement shall remain of full force and effect.

	
30.

	
Headings.  The headings in this Agreement are for convenience purposes and shall be ignored for purposes of enforcing this Agreement, do not constitute a part of this Agreement, and may not be used by any party hereto to characterize, interpret, limit or affect otherwise any provision of this Agreement.

[signature page follows]

14

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

	

ENERGY RESOURCES 12, L.P.

By Energy Resources 12 GP, LLC, its general partner

	
 

	
 

	
By:

	
 

	
 

	
Name: David McKenney

	
Title: Manager, Chief Financial Officer

 

 

 

 

 

 

[Signature Page to Escrow Agreement]

  

BRANCH BANKING AND TRUST COMPANY

as Escrow Agent

By:  _____________________________________

Name:

Title:

 

 

 

 

 

[Signature Page to Escrow Agreement]

DAVID LERNER ASSOCIATES, INC.

By:  ____________________________________

Name: James Curran

Title: Senior Vice President and Controller

 

 

 

 

 

 

 

[Signature Page to Escrow Agreement]

  

SCHEDULE A

	
1.

	
Escrow Agent Fees.

Acceptance Fee:        $1,000

Annual Escrow Fee:  $4,500

TOTAL       $5,500

The Acceptance Fee and the Escrow Fee are payable upon execution of this Agreement.  In the event the escrow is not funded, the Acceptance Fee and all related expenses, including attorneys’ fees, costs and expenses remain due and payable, and if paid, will not be refunded.

 

The fees quoted in this schedule apply to services ordinarily rendered in the administration of an escrow account and are subject to reasonable adjustment based on final review of documents, or when Escrow Agent is called upon to undertake unusual or extraordinary duties or responsibilities, or as changes in law, procedures, or the cost of doing business demand.  Services in addition to and not contemplated in this Agreement, including document amendments and revisions, non-standard cash and/or investment transactions, calculations, notices and reports, and legal fees, will be billed as expenses.

Unless otherwise indicated, the above fees relate to the establishment of one escrow account.  Additional sub-accounts governed by this Agreement may incur an additional charge.  Transaction costs include charges for wire transfers, checks, internal transfers and securities transactions.

The fees quoted in this schedule are subject to reasonable adjustment by Escrow Agent in accordance with its customary practices and if it is called upon to undertake further unusual or extraordinary duties or responsibilities, or as changes in law, procedures, or the cost of doing business demand.

	
2.

	
Taxpayer Identification Number.

Company: 81-4805237

	
3.

	
Notice Addresses.

If to the Company at:

Energy Resources 12, L.P.

c/o Energy Resources 12 GP LLC

120 W. 3rd Street

Ft. Worth, Texas 76102

Attention: David McKenney

Tel: (817) 882.9192

Fax: (804) 727.6305

A-1

with copy to:

Haynes and Boone, LLP

1221 McKinney Street, Suite 2100

 Houston, Texas 77010

 Attention: William B. Nelson

If to Escrow Agent at:

Branch Banking and Trust Company

223 West Nash Street

Wilson, NC 27893

Attn:  Marsha R. Hart

Tel: (252) 246-2126

Fax: (252) 246-4303

If to the Dealer Manager at:

David Lerner Associates, Inc.

477 Jericho Turnpike

PO Box 9006

Syosset, New York 11791

Attention: James Curran

with copy to:

 Pillsbury Winthrop Shaw Pittman LLP

 1540 Broadway

 New York, NY 10036

 Fax: (212) 858.1500

 Attention: Peter A. Baumgaertner

 

 

A-2

 

  

	
4.

	
Designated Email Accounts and Telephone Call-Back Numbers (for persons designated to send and receive notices by e-mail).

 

	
Company:

	
Name

	
Email Address

	 	
Phone

	 	 	 	 	 
	 	
David McKenney

	
dmckenney@applereit.com

	 	
(817) 882.9192

	 	 	 	 	 
	
Escrow Agent:

	
Name

	
Email Address

	 	
Phone

	 	 	 	 	 
	 	
Marsha R. Hart

	
mrhart@bbandt.com

	 	
(252) 246-2126

	 	 	 	 	 
	
Dealer Manager:

	
Name

	
Email Address

	 	
Phone

	 	 	 	 	 
	 	
Donato Ferone

	
donato.ferone@davidlerner.com

	 	
(516) 921-4200

	 	 	 	 	 

 

 

 

A-3

SCHEDULE B

	
1.

	
Certificates of each of the Chief Financial Officer and the Corporate Secretary of the Company that (a) the offer and sale of the  Common Units described in the Prospectus, dated __, 2017 have been registered under the Securities Act of 1933, as amended, and have been qualified for sale or are exempt from applicable state securities or “blue sky” laws and (b) all representations and warranties of the Company set forth in the Agreement are true and correct in all material respects on and as of the date of such certificate as if made on the date thereof; and

	
2.

	
Certificate of each of an authorized officer and the Corporate Secretary of the Dealer Manager that all representations and warranties of the Dealer Manager set forth in the Agreement are true and correct in all material respects on and as of the date of such certificate as if made on the date thereof.

B-1Exhibit 10.3 

 

 

 

LOAN AGREEMENT

 

IMPORTANT NOTICE

 

THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

 

This Agreement dated as of February 9, 2017, is between Bank of America, N.A. (the “Bank”) and Sundance Energy, L.P. (the “Borrower”).

 

1.             FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS

 

1.1           Line of Credit Amount.

 

	(a)	During the availability period described below, the Bank will provide a line of credit to the Borrower (the “Line of Credit”). The amount of the Line of Credit (the “Facility No. 1 Commitment”) is Five Hundred Thousand and 00/100 Dollars ($500,000.00).
	 	 
	(b)	This is a revolving line of credit. During the availability period, the Borrower may repay principal amounts and reborrow them.
	 	 
	(c)	The Borrower agrees not to permit the principal balance outstanding to exceed the Facility No. 1 Commitment. If the Borrower exceeds this limit, the Borrower will immediately pay the excess to the Bank upon the Bank’s demand.

 

1.2          Availability Period. The Line of Credit is available between the date of this Agreement and February 9, 2018, or such earlier date as the availability may terminate as provided in this Agreement (the “Facility No. 1 Expiration Date”).

 

The availability period for this Line of Credit will be considered renewed if and only if the Bank has sent to the Borrower a written notice of renewal for the Line of Credit (the “Renewal Notice”). If this Line of Credit is renewed, it will continue to be subject to all the terms and conditions set forth in this Agreement except as modified by the Renewal Notice. If this Line of Credit is renewed, the term “Expiration Date” shall mean the date set forth in the Renewal Notice as the Expiration Date and the same process for renewal will apply to any subsequent renewal of this Line of Credit. A renewal fee may be charged at the Bank’s option. The amount of the renewal fee will be specified in the Renewal Notice.

 

1.3           Repayment Terms.

 

	(a)	The Borrower will pay interest on March 9, 2017, and then on the same day of each month thereafter until payment in full of any principal outstanding under this facility.
	 	 
	(b)	The Borrower will repay in full any principal, interest or other charges outstanding under this facility no later than the Facility No. 1 Expiration Date.

 

1.4           Interest Rate.

 

	(a)	The interest rate is a rate per year equal to the LIBOR Daily Floating Rate plus 1.25 percentage point(s).
	 	 
	(b)	The LIBOR Daily Floating Rate is a fluctuating rate of interest which can change on each banking day. The rate will be adjusted on each banking day to equal the London Interbank Offered Rate (or a comparable or successor rate which is approved by the Bank) for U.S. Dollar deposits for delivery on the date in question for a one month

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

	-1-

	 

 

term beginning on that date. The Bank will use the London Interbank Offered Rate as published by Bloomberg (or other commercially available source providing quotations of such rate as selected by the Bank from time to time) as determined at approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in question, as adjusted from time to time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs. If such rate is not available at such time for any reason, then the rate will be determined by such alternate method as reasonably selected by the Bank. A “London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars. If at any time the LIBOR Daily Floating Rate is less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

 

2.            COLLATERAL

 

The following parties own some or all of the collateral, as shown below: Glade M. Knight (“Glade M. Knight”).

 

2.1          Personal Property. The personal property listed below now owned or owned in the future by the parties listed below will secure one or more of the facilities under this Agreement. The collateral is further defined in security agreement(s) executed by the owners of the collateral.

 

	(a)	Time deposits with the Bank and owned by Glade M. Knight in an amount not less than Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the “Minimum Amount”) as such Minimum Amount shall be increased from time to time by any interest on such time deposits which is added to the principal of such time deposits upon rollover, renewal or otherwise.

 

3.            LOAN ADMINISTRATION AND FEES

 

3.1          Fees.

 

The Borrower will pay to the Bank the fees set forth on Schedule A.

 

3.2          Collection of Payments.

 

	(a)	Payments will be made by debit to a deposit account, if direct debit is provided for in this Agreement or is otherwise authorized by the Borrower. For payments not made by direct debit, payments will be made by mail to the address shown on the Borrower’s statement, or by such other method as may be permitted by the Bank.
	 	 
	(b)	Each disbursement by the Bank and each payment by the Borrower will be evidenced by records kept by the Bank which will, absent manifest error, be conclusively presumed to be correct and accurate and constitute an account stated between the Borrower and the Bank.

 

3.3          Borrower’s Instructions. Subject to the terms, conditions and procedures stated elsewhere in this Agreement, the Bank may honor instructions for advances or repayments and any other instructions under this Agreement given by the Borrower (if an individual), or by any one of the individuals the Bank reasonably believes is authorized to sign loan agreements on behalf of the Borrower, or any other individual(s) designated by any one of such authorized signers (each an “Authorized Individual”). The Bank may honor any such instructions made by any one of the Authorized Individuals, whether such instructions are given in writing or by telephone, telefax or Internet and intranet websites designated by the Bank with respect to separate products or services offered by the Bank.

 

3.4          Direct Debit.

 

	(a)	The Borrower agrees that on the due date of any amount due under this Agreement, the Bank will debit the amount due from deposit account number ________________________ owned by the Borrower or such other of the Borrower’s accounts with the Bank as designated in writing by the Borrower (the “Designated Account”). Should there be insufficient funds in the Designated Account to pay all such sums when due, the full amount of such deficiency shall be immediately due and payable by the Borrower.
	 	 
	(b)	The Borrower may terminate this direct debit arrangement at any time by sending written notice to the Bank at the address specified at the end of this Agreement. If the Borrower terminates this arrangement, then the principal amount outstanding under this Agreement will at the option of the Bank bear interest at a rate per annum which is 0.5 percentage point(s) higher than the rate of interest otherwise provided under this Agreement.

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

	-2-

	 

 

3.5          Banking Days. Unless otherwise provided in this Agreement, a banking day is a day other than a Saturday, Sunday or other day on which commercial banks are authorized to close, or are in fact closed, in the state where the Bank’s lending office is located, and, if such day relates to amounts bearing interest at an offshore rate (if any), means any such day on which dealings in dollar deposits are conducted among banks in the offshore dollar interbank market. All payments and disbursements which would be due or which are received on a day which is not a banking day will be due or applied, as applicable, on the next banking day.

 

3.6          Interest Calculation. Except as otherwise stated in this Agreement, all interest and fees, if any, will be computed on the basis of a 360-day year and the actual number of days elapsed. This results in more interest or a higher fee than if a 365-day year is used. Installments of principal which are not paid when due under this Agreement shall continue to bear interest until paid. To the extent that any calculation of interest or any fee required to be paid under this Agreement shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

 

3.7          Default Rate. Upon the occurrence of any default or after maturity or after judgment has been rendered on any obligation under this Agreement, all amounts outstanding under this Agreement, including any unpaid interest, fees, or costs, will at the option of the Bank bear interest at a rate which is 6.0 percentage point(s) higher than the rate of interest otherwise provided under this Agreement. This may result in compounding of interest. This will not constitute a waiver of any default.

 

4.            CONDITIONS

 

Before the Bank is required to extend any credit to the Borrower under this Agreement, it must receive any documents and other items it may reasonably require, in form and content acceptable to the Bank, including any items specifically listed below.

 

4.1          Authorizations. If the Borrower or any guarantor is anything other than a natural person, evidence that the execution, delivery and performance by the Borrower and/or such guarantor of this Agreement and any instrument or agreement required under this Agreement have been duly authorized.

 

4.2          Governing Documents. If required by the Bank, a copy of the Borrower’s organizational documents.

 

4.3          Guaranties. Guaranties signed by David S. McKenney (“D. S. McKenney”).

 

4.4          Security Agreements. Signed original security agreements covering the personal property collateral which the Bank requires.

 

4.5          Perfection and Evidence of Priority. Evidence that the security interests and liens in favor of the Bank are valid, enforceable, properly perfected in a manner acceptable to the Bank and prior to all others’ rights and interests, except those the Bank consents to in writing. All title documents for motor vehicles which are part of the collateral must show the Bank’s interest.

 

4.6          Good Standing. Certificates of good standing for the Borrower from its state of formation and from any other state in which the Borrower is required to qualify to conduct its business.

 

4.7          Insurance. Evidence of insurance coverage, as required in the “Covenants” section of this Agreement.

 

5.            REPRESENTATIONS AND WARRANTIES

 

When the Borrower signs this Agreement, and until the Bank is repaid in full, the Borrower makes the following representations and warranties. Each request for an extension of credit constitutes a renewal of these representations and warranties as of the date of the request:

 

5.1          Formation. If the Borrower is anything other than a natural person, it is duly formed and existing under the laws of the state or other jurisdiction where organized.

 

5.2          Authorization. This Agreement, and any instrument or agreement required under this Agreement, are within the Borrower’s powers, have been duly authorized, and do not conflict with any of its organizational papers.

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

	-3-

	 

 

5.3          Enforceable Agreement. This Agreement is a legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, and any instrument or agreement required under this Agreement, when executed and delivered, will be similarly legal, valid, binding and enforceable.

 

5.4          Good Standing. In each state in which the Borrower does business, it is properly licensed, in good standing, and, where required, in compliance with fictitious name statutes.

 

5.5          No Conflicts. This Agreement does not conflict with any law, agreement, or obligation by which the Borrower is bound.

 

5.6          Financial Information. All financial and other information that has been or will be supplied to the Bank is sufficiently complete to give the Bank accurate knowledge of the Borrower’s (and any guarantor’s) financial condition, including all material contingent liabilities. Since the date of the most recent financial statement provided to the Bank, there has been no material adverse change in the business condition (financial or otherwise), operations, properties or prospects of the Borrower (or any guarantor). If the Borrower is comprised of the trustees of a trust, the above representations shall also pertain to the trustor(s) of the trust.

 

5.7.         Lawsuits. There is no lawsuit, tax claim or other dispute pending or threatened against the Borrower which, if lost, would impair the Borrower’s financial condition or ability to repay the loan, except as have been disclosed in writing to the Bank.

 

5.8          Collateral. All collateral required in this Agreement is owned by the grantor of the security interest free of any title defects or any liens or interests of others, except those which have been approved by the Bank in writing.

 

5.9          Permits. Franchises. The Borrower possesses all permits, memberships, franchises, contracts and licenses required and all trademark rights, trade name rights, patent rights, copyrights and fictitious name rights necessary to enable it to conduct the business in which it is now engaged.

 

5.10        Other Obligations. The Borrower is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation, except as have been disclosed in writing to the Bank.

 

5.11        Tax Matters. The Borrower has no knowledge of any pending assessments or adjustments of its income tax for any year and all taxes due have been paid, except as have been disclosed in writing to the Bank.

 

5.12        No Event of Default. There is no event which is, or with notice or lapse of time or both would be, a default under this Agreement.

 

5.13        Insurance. The Borrower has obtained, and maintained in effect, the insurance coverage required in the “Covenants” section of this Agreement.

 

6.            COVENANTS

 

The Borrower agrees, so long as credit is available under this Agreement and until the Bank is repaid in full:

 

6.1          Use of Proceeds.     

 

	(a)	To use the proceeds of Facility No. 1 only for working capital needs of the Borrower.
	 	 
	(b)	The proceeds of the credit extended under this Loan Agreement may not be used directly or indirectly to purchase or carry any “margin stock” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties for the purpose of purchasing or carrying any such “margin stock,” or to reduce or retire any indebtedness incurred for such purpose.

 

6.2 Financial Information. To provide, or cause to be provided, promptly and in any event within fifteen (15) days after written request from the Bank, financial statements, tax returns, investment statements and other information in form and content acceptable to the Bank relating to the affairs of the Borrower, any guarantor, accommodation party or other

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

	-4-

	 

obligor with respect to the loan as requested by the Bank in writing from time to time.

 

6.3          Additional Negative Covenants. Not to, without the Bank’s written consent:

 

	(a)	Engage in any business activities substantially different from the Borrower’s present business.
	 	 
	(b)	Liquidate or dissolve the Borrower’s business.
	 	 

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

	-5-

	 

		
	(c)	Voluntarily suspend the Borrower’s business for more than zero (0) days in any three hundred sixty-five (365) day period.

 

6.4          Notices to Bank. To promptly notify the Bank in writing of:

 

	(a)	Any lawsuit in which the claim for damages exceeds Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) against the Borrower or any Obligor.
	 	 
	(b)	Any substantial dispute between any governmental authority and the Borrower or any Obligor.
	 	 
	(c)	Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default.
	 	 
	(d)	Any change in the Borrower’s or any Obligor’s name, legal structure, principal residence, or name on any driver’s license or special identification card issued by any state (for an individual), state of registration (for a registered entity), place of business, or chief executive office if the Borrower or any Obligor has more than one place of business.

 

For purposes of this Agreement, “Obligor” shall mean any guarantor, or any party pledging collateral to the Bank, or, if the Borrower is comprised of the trustees of a trust, any trustor.

 

6.5          Insurance.

 

	(a)	General Business Insurance. To maintain insurance satisfactory to the Bank as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of the Borrower’s properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers’ compensation, and any other insurance which is usual for the Borrower’s business. Each policy shall provide for at least 30 days prior notice to the Bank of any cancellation thereof.

 

6.6          Compliance with Laws. To comply with the laws (including any fictitious or trade name statute), regulations, and orders of any government body with authority over the Borrower’s business. The Bank shall have no obligation to make any advance to the Borrower except in compliance with all applicable laws and regulations and the Borrower shall fully cooperate with the Bank in complying with all such applicable laws and regulations.

 

6.7          Books and Records. To maintain adequate books and records.

 

6.8          Audits. To allow the Bank and its agents to inspect the Borrower’s properties and examine, audit, and make copies of books and records at any reasonable time. If any of the Borrower’s properties, books or records are in the possession of a third party, the Borrower authorizes that third party to permit the Bank or its agents to have access to perform inspections or audits and to respond to the Bank’s requests for information concerning such properties, books and records.

 

6.9          Perfection of Liens. To help the Bank perfect and protect its security interests and liens, and reimburse it for related costs it incurs to protect its security interests and liens.

 

6.10        Cooperation. To take any action reasonably requested by the Bank to carry out the intent of this Agreement.

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

	-6-

	 

 

7.            DEFAULT AND REMEDIES

 

If any of the following events of default occurs, the Bank may do one or more of the following: declare the Borrower in default, stop making any additional credit available to the Borrower, and require the Borrower to repay its entire debt immediately and without prior notice. If an event which, with notice or the passage of time, will constitute an event of default has occurred and is continuing, the Bank has no obligation to make advances or extend additional credit under this Agreement. In addition, if any event of default occurs, the Bank shall have all rights, powers and remedies available under any instruments and agreements required by or executed in connection with this Agreement, as well as all rights and remedies available at law or in equity. If an event of default occurs under the paragraph entitled “Bankruptcy/Receivers,” below, with respect to the Borrower, then the entire debt outstanding under this Agreement will automatically be due immediately.

 

7.1          Failure to Pay. The Borrower fails to make a payment under this Agreement when due.

 

7.2          Covenants. Any default in the performance of or compliance with any obligation, agreement or other provision contained in this Agreement (other than those specifically described as an event of default in this Article).

 

7.3          Other Bank Agreements. Any default occurs under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document required by or delivered in connection with this Agreement or any such document is no longer in effect, or any guarantor purports to revoke or disavow the guaranty; or any representation or warranty made by any guarantor is false when made or deemed to be made; or any default occurs under any other agreement the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has with the Bank or any affiliate of the Bank.

 

7.4          Cross-default. Any default occurs under any agreement in connection with any credit the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has obtained from anyone else or which the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has guaranteed.

 

7.5          False Information. The Borrower or any Obligor has given the Bank false or misleading information or representations.

 

7.6          Bankruptcy/Receivers. The Borrower, any Obligor, or any general partner of the Borrower or of any Obligor files a bankruptcy petition, a bankruptcy petition is filed against any of the foregoing parties and such petition is not dismissed within a period of forty-five (45) days after the filing, or the Borrower, any Obligor, or any general partner of the Borrower or of any Obligor makes a general assignment for the benefit of creditors; or a receiver or similar official is appointed for a substantial portion of Borrower’s or any Obligor’s business; or the business is terminated, or such Obligor is liquidated or dissolved.

 

7.7          Lien Priority. The Bank fails to have an enforceable first lien (except for any prior liens to which the Bank has consented in writing) on or security interest in any property given as security for this Agreement (or any guaranty).

 

7.8          Judgments. Any notice of judgment lien is filed against the Borrower or any Obligor; or a notice of levy and/or of a writ of attachment or execution, or other like process, is served against the assets of the Borrower or any Obligor in an aggregate amount of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) or more.

 

7.9          Death. if the Borrower or any Obligor is a natural person, the Borrower or such Obligor dies or becomes legally incompetent; if the Borrower or any Obligor is a trust, a trustor dies or becomes legally incompetent; if the Borrower or any Obligor is a partnership, any general partner dies or becomes legally incompetent.

 

7.10        Material Adverse Change. A material adverse change occurs, or is reasonably likely to occur, in the Borrower’s (or any Obligor’s) business condition (financial or otherwise), operations or properties, or ability to repay the credit; or the Bank determines that it is insecure for any other reason.

 

7.11        Government Action. Any government authority takes action that the Bank believes materially adversely affects the Borrower’s or any Obligor’s financial condition or ability to repay.

 

Ref #:1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

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8.            ENFORCING THIS AGREEMENT; MISCELLANEOUS

 

8.1          Accounting Principles and Financial Computations. Except as otherwise stated in this Agreement, all financial information provided to the Bank and computation of all financial covenants will be made in accordance with accounting principles applied consistently with those applied in the preparation of the financial statements provided to the Bank prior to the date of this Agreement.

 

8.2          Governing Law. Except to the extent that any law of the United States may apply, this Agreement shall be governed and interpreted according to the laws of Virginia (the “Governing Law State”), without regard to any choice of law, rules or principles to the contrary. Nothing in this paragraph shall be construed to limit or otherwise affect any rights or remedies of the Bank under federal law.

 

8.3          Venue and Jurisdiction. The Borrower agrees that any action or suit against the Bank arising out of or relating to this Agreement shall be filed in federal court or state court located in the Governing Law State. The Borrower agrees that the Bank shall not be deemed to have waived its rights to enforce this section by filing an action or suit against the Borrower in a venue outside of the Governing Law State. If the Bank does commence an action or suit arising out of or relating to this Agreement, the Borrower agrees that the case may be filed in federal court or state court in the Governing Law State. The Bank reserves the right to commence an action or suit in any other jurisdiction where the Borrower, any Guarantor, or any collateral has any presence or is located. The Borrower consents to personal jurisdiction and venue in such forum selected by the Bank and waives any right to contest jurisdiction and venue and the convenience of any such forum. The provisions of this section are material inducements to the Bank’s acceptance of this Agreement.

 

8.4          Successors and Assigns. This Agreement is binding on the Borrower’s and the Bank’s successors and assignees. The Borrower agrees that it may not assign this Agreement without the Bank’s prior consent. The Bank may sell participations in or assign this loan, and may exchange information about the Borrower (including, without limitation, any information regarding any hazardous substances) with actual or potential participants or assignees. If a participation is sold or the loan is assigned, the purchaser will have the right of set-off against the Borrower.

 

8.5          Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER DOCUMENTS CONTEMPLATED HEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION AND (c) CERTIFIES THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE.

 

8.6          Waiver of Class Actions. The terms “Claim” or “Claims” refer to any disputes, controversies, claims, counterclaims, allegations of liability, theories of damage, or defenses between Bank of America, N.A., its subsidiaries and affiliates, on the one hand, and the other parties to this Agreement, on the other hand (all of the foregoing each being referred to as a “Party” and collectively as the “Parties”). Whether in state court, federal court, or any other venue, jurisdiction, or before any tribunal, the Parties agree that all aspects of litigation and trial of any Claim will take place without resort to any form of class or representative action. Thus the Parties may only bring Claims against each other in an individual capacity and waive any right they may have to do so as a class representative or a class member in a class or representative action. THIS CLASS ACTION WAIVER PRECLUDES ANY PARTY FROM PARTICIPATING IN OR BEING REPRESENTED IN ANY CLASS OR REPRESENTATIVE ACTION REGARDING A CLAIM.

 

8.7          CONFESSION OF JUDGMENT. THE BORROWER HEREBY IRREVOCABLY APPOINTS EACH OF STEPHEN A. MAYO AND RUTH F. RILEY, ANY ONE OF WHOM MAY ACT ALONE, AS ITS DULY-CONSTITUTED, TRUE AND LAWFUL ATTORNEY-IN-FACT WITH AUTHORITY, IN THE NAME, PLACE AND STEAD OF THE BORROWER OR ANY OF THEM (IF MORE THAN ONE) TO CONFESS JUDGMENT IN THE OFFICE OF THE CIRCUIT COURT OF THE COUNTY OF FAIRFAX, VIRGINIA. AGAINST THE BORROWER OR ANY OF THEM (IF MORE THAN ONE), IN THE FULL AMOUNT DUE UNDER THIS NOTE (INCLUDING, WITHOUT LIMITATION, PRINCIPAL, ACCRUED INTEREST AND LATE FEES) AND ANY MODIFICATION, RENEWAL OR SUBSTITUTION HEREOF, WHETHER NOW OR HEREAFTER EXISTING, PLUS ALL COSTS OF CONFESSING AND ENTERING JUDGMENT (INCLUDING, WITHOUT

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

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LIMITATION, ATTORNEY’S FEES), UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT UNDER THIS NOTE OR ANY MODIFICATION, RENEWAL OR SUBSTITUTION THEREOF, WHETHER NOW OR HEREAFTER EXISTING. SUCH APPOINTMENT SHALL CONSTITUTE A POWER COUPLED WITH AN INTEREST AND SHALL REMAIN IN EFFECT UNTIL ANY AND ALL INDEBTEDNESS EVIDENCED BY THIS NOTE HAS BEEN PAID IN FULL. THE HOLDER OF THIS NOTE MAY APPOINT A SUBSTITUTE FOR ANY ATTORNEY-IN-FACT NAMED ABOVE BY SPECIFICALLY NAMING SUCH SUBSTITUTE ATTORNEY-IN-FACT IN AN INSTRUMENT RECORDED AND INDEXED IN THE CLERK’S OFFICE IDENTIFIED ABOVE AS PROVIDED IN VA. CODE SEC. 8.01-435.

 

8.8          Severability; Waivers. If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced. The Bank retains all rights, even if it makes a loan after default. If the Bank waives a default, it may enforce a later default. Any consent or waiver under this Agreement must be in writing.

 

8.9          Expenses.

 

	(a)	The Borrower shall pay to the Bank immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys’ fees, expended or incurred by the Bank in connection with (i) the negotiation and preparation of this Agreement and any related agreements, the Bank’s continued administration of this Agreement and such related agreements, and the preparation of any amendments and waivers related to this Agreement or such related agreements, (ii) filing, recording and search fees, appraisal fees, field examination fees, title report fees, and documentation fees with respect to any collateral and books and records of the Borrower or any Obligor, (iii) the Bank’s costs or losses arising from any changes in law which are allocated to this Agreement or any credit outstanding under this Agreement, and (iv) costs or expenses required to be paid by the Borrower or any Obligor that are paid, incurred or advanced by the Bank.
	 	 
	(b)	The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages, judgments, and costs of any kind relating to or arising directly or indirectly out of (i) this Agreement or any document required hereunder, (ii) any credit extended or committed by the Bank to the Borrower hereunder, and (iii) any litigation or proceeding related to or arising out of this Agreement, any such document, or any such credit, including, without limitation, any act resulting from the Bank complying with instructions the Bank reasonably believes are made by any Authorized Individual. This paragraph will survive this Agreement’s termination, and will benefit the Bank and its officers, employees, and agents.
	 	 
	(c)	The Borrower shall reimburse the Bank for any reasonable costs and attorneys’ fees incurred by the Bank in connection with (i) the enforcement or preservation of the Bank’s rights and remedies and/or the collection of any obligations of the Borrower which become due to the Bank and in connection with any “workout” or restructuring, and (ii) the prosecution or defense of any action in any way related to this Agreement, the credit provided hereunder or any related agreements, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by the Bank or any other person) relating to the Borrower or any other person or entity.

 

8.10        Individual Liability. If the Borrower is a partnership, the Bank may proceed against the business and non-business property of each general partner of the Borrower in enforcing this and other agreements relating to this loan.

 

8.11        Set-Off. Upon and after the occurrence of an event of default under this Agreement, (a) the Borrower hereby authorizes the Bank, at any time and from time to time, without notice, which is hereby expressly waived by the Borrower, and whether or not the Bank shall have declared any credit subject hereto to be due and payable in accordance with the terms hereof, to set off against, and to appropriate and apply to the payment of, the Borrower’s Obligations (whether matured or unmatured, fixed or contingent, liquidated or unliquidated), any and all amounts owing by the Bank to the Borrower (whether payable in U.S. dollars or any other currency, whether matured or unmatured, and in the case of deposits, whether general or special (except trust and escrow accounts), time or demand and however evidenced), and (b) pending any such action, to the extent necessary, to hold such amounts as collateral to secure such Obligations and to return as unpaid for insufficient funds any and all checks and other items drawn against any deposits so held as the Bank, in its sole discretion, may elect. The Borrower hereby grants to the Bank a security interest in all deposits and accounts maintained with the Bank to secure the payment of all Obligations of the Borrower to the Bank under this Agreement and all agreements, instruments and documents related to this Agreement. “Obligations” means all obligations, now or 

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

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hereafter existing, of the Borrower to the Bank under this Agreement and under any other agreement or instrument executed in connection with this Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

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8.12        One Agreement. This Agreement and any related security or other agreements required by this Agreement constitute the entire agreement between the Borrower and the Bank with respect to each credit subject hereto and supersede all prior negotiations, communications, discussions and correspondence concerning the subject matter hereof. In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail.

 

8.13        Notices. Unless otherwise provided in this Agreement or in another agreement between the Bank and the Borrower, all notices required under this Agreement shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this Agreement, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as the Bank and the Borrower may specify from time to time in writing. Notices and other communications shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram, lettergram or mailgram), when delivered.

 

8.14        Headings. Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Agreement.

 

8.15        Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original, and all of which when taken together shall constitute one and the same Agreement. Delivery of an executed counterpart of this Agreement (or of any agreement or document required by this Agreement and any amendment to this Agreement) by telecopy or other electronic imaging means shall be as effective as delivery of a manually executed counterpart of this Agreement; provided, however, that the telecopy or other electronic image shall be promptly followed by an original if required by the Bank.

 

8.16        Borrower Information; Reporting to Credit Bureaus. The Borrower authorizes the Bank at any time to verify or check any information given by the Borrower to the Bank, check the Borrower’s credit references, verify employment, and obtain credit reports. The Borrower agrees that the Bank shall have the right at all times to disclose and report to credit reporting agencies and credit rating agencies such information pertaining to the Borrower and/or all guarantors as is consistent with the Bank’s policies and practices from time to time in effect.

 

8.17        Document Receipt Cut-Off Date. Unless this Agreement and any documents required by this Agreement have been signed and returned to the Bank within 60 days after the date of this Agreement (the “Document Receipt Cut-Off Date”), the Bank shall have the right to notify the Borrower in writing that the Bank’s commitment to extend credit under this Agreement has expired. If the executed Agreement and accompanying loan documents are received after the Document Receipt Cut-Off Date, the Bank shall have a reasonable period of time after receipt of the executed Agreement and accompanying loan documents to provide such notice.

 

8.18        Amendments. This Agreement may be amended or modified only in writing signed by each party hereto.

 

The remainder of this document is intentionally left blank. Signature page follows.

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

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The Borrower executed this Agreement as of the date stated at the top of the first page, intending to create an instrument executed under seal.

 

Bank:

 

	Bank of America, N.A.	 
	 	 
	By:		 
	 	Mark Kemp, Senior Vice President	 

 

Borrower:

 

Sundance Energy, L.P.

 

	By: Sundance Energy GP, LLC, its General Partner
	 
	By:	 	  (Seal)
	 	Glade-Knight, Chief Executive Officer	 
	 	 	 
	By:	 	   (Seal)
	 	David McKenney, Chief Financial Officer	 

 

	Address where notices to Sundance Energy, L.P. are to be sent:	Address where notices to the Bank are to be sent:
	 	 
	814 E. Main St.	Doc Retention Center
	Richmond, VA 23219-3306	NC1-001-05-13
	 	One Independence Center
	 	101 North Tryon St.
	 	Charlotte, NC 28255-0001

 

Federal law requires Bank of America, N.A. (the “Bank”) to provide the following notice. The notice is not part of the foregoing agreement or instrument and may not be altered. Please read the notice carefully.

 

(1)          USA PATRIOT ACT NOTICE

 

Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or obtains a loan. The Bank will ask for the Borrower’s legal name, address, tax ID number or social security number and other identifying information. The Bank may also ask for additional information or documentation or take other actions reasonably necessary to verify the identity of the Borrower, guarantors or other related persons.

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

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SCHEDULE A

 

FEES

 

	(a)	Late Fee. To the extent permitted by law, the Borrower agrees to pay a late fee in an amount not to exceed four percent (4%) of any payment that is more than fifteen (15) days late. The imposition and payment of a late fee shall not constitute a waiver of the Bank’s rights with respect to the default.

 

Ref #: 1002474994 : - Sundance Energy, L.P.

Standard Loan Agreement

 

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