Document:

e10-58magellanwtsbnote

Executed Version   3396720.4    PROMISSORY NOTE   (Revolving Line of Credit Note)   $8,000,000.00 Odessa, Texas September 17, 2014   1. Borrower’s Promise to Pay.  FOR VALUE RECEIVED, NAUTILUS POPLAR LLC, a   Montana limited liability company (hereinafter called “Borrower”), whose principal   address is 1775 Sherman Street, Suite 1950, Denver, Colorado 80203, promises to pay to   the order of WEST TEXAS STATE BANK, (hereinafter called “Lender”) at its banking   house in the City of Odessa, Ector County, Texas the principal sum of   EIGHT MILLION DOLLARS ($8,000,000.00), or so much thereof as may be   advanced hereunder prior to maturity, together with interest from date funded to   Borrower until maturity on the unpaid principal balance thereof from time to time   outstanding at the Stated Rate and with interest on all past due amounts, both principal   and accrued interest, at the Past Due Rate, provided, that for the full term of this Note the   interest rate produced by the aggregate of all sums paid or agreed to be paid to the holder   of this Note for the use, forbearance or detention of the debt evidenced hereby shall not   exceed the Ceiling Rate.   2. Loan Agreement.  This Note and any substitutions, replacements, modifications, renewals   and/or extensions thereof are described in and are subject to the terms and provisions of   that certain Loan Agreement dated as of the date hereof (as amended, restated,   supplemented or otherwise modified from time to time, “Loan Agreement”; terms used   herein but not defined herein shall have the meanings given in the Loan Agreement)   between Lender, Borrower and Magellan Petroleum Corporation (hereinafter called   “Guarantor”).  The Loan Agreement, among other things, contains provisions regarding   the amount that the Lender is required to advance under the terms of this Note and   provisions for the acceleration of the maturity hereof upon the happening or omission of   certain stated events upon the terms and conditions therein specified and the payment of   fees and expenses as set out in the Loan Agreement.   3. Interest.  “Stated Rate” means, on any day, a rate per annum equal to the Index Rate from   time to time in effect, provided that if on any day the Stated Rate shall (a) exceed the   Ceiling Rate for that day, then the Stated Rate shall be fixed at the Ceiling Rate on that   day and on each day thereafter until the total amount of interest accrued at the Stated Rate   on the unpaid balance of this Note equals the total amount of interest which would have   accrued if there were no Ceiling Rate and/or (b) be less than three and one-fourths   percent (3.25%) (the “Floor Rate”), then the Floor Rate shall apply in lieu of the Stated   Rate until such time that the Stated Rate exceeds or is equal to the Floor Rate.   “Index Rate” for purposes of this Note shall mean the current rate of interest per annum   as published in the Wall Street Journal as the Prime Rate in effect until the next Change   Date.  The Prime Rate may change and each change in the Prime Rate shall be effective   on the date of publication of said change (referred to as “Change Date”) until the next   Change Date.  Each change in the Index Rate shall be effective without special notice to   the Borrower or any other person or entity.  The Index Rate is a reference rate and does   not necessarily represent the lowest or best rate actually charged to any customer.  If, for     

 

        any reason, the Index Rate is no longer available at the time of the change, the Lender   will choose a new index based upon a reasonable comparable measure and reasonable   comparable information and Lender will notify Borrower of the substitution of any such   new index.   Interest on the amount of each advance against this Note shall be computed on the   amount of each advance and from the date of each advance.  Interest shall be computed   for the actual number of days elapsed and on the basis of a year consisting of 365 or 366   days, as the case may be.   4. Past Due Rate.  At Lender’s option and without prior notice, upon and during the   continuance of any default or Event of Default under this Note or any related Loan   Documents, Lender may increase the interest rate applicable to this Note to a rate per   annum equal to six percent (6.0%) above the Stated Rate (the “Past Due Rate”), not to   exceed at any time the lesser of 18% or the Ceiling Rate, and said Past Due Rate shall   remain in effect until the default or Event of Default has been cured and that fact has   been communicated to and confirmed by Lender.  Lender shall give written notice to   Borrower of Lender’s imposition of the Past Due Rate.  Lender’s imposition of the Past   Due Rate shall not constitute an election of remedies or otherwise limit Lender’s rights   concerning other remedies available to Lender as a result of the occurrence of an Event of   Default.   5. Late Charges.  If a payment is ten (10) days or more late, Borrower will be charged five   percent (5.0%) of the amount of payment or $125.00, whichever is less.   6. Ceiling Rate.  “Ceiling Rate” means, on any day, the maximum nonusurious rate of   interest permitted for that day by whichever of applicable federal or Texas law permits   the higher interest rate, stated as a rate per annum. On each day, if any, that Chapter 303   (“Chapter 303”) of the Texas Finance Code establishes the “Weekly Ceiling Rate”, the   Ceiling Rate shall be the “indicated rate ceiling” as defined in Chapter 303 for that day.    Lender may from time to time, as to current and future balances, implement any other   ceiling under Chapters 302 or 303 of the Texas Finance Code by notice to Borrower, if   and to the extent permitted by, Chapters 302 and 303.   Without notice to the Borrower or any other person or entity, the Index Rate and the   Ceiling Rate shall each automatically fluctuate upward and downward as and in the   amount by which Lender’s Index Rate and the maximum nonusurious rate of interest,   respectively, fluctuate.   7. Savings.  If, for any reason whatever, the interest paid or received on this Note during the   full term of this Note shall produce a rate which exceeds the Ceiling Rate, the holder of   this Note shall refund to the Borrower or, at the holder’s option, credit against the   principal of this Note such portion of said interest as shall be necessary to cause the   interest paid on this Note to produce a rate equal to the Ceiling Rate.  All sums paid or   forbearance or detention of the indebtedness evidenced hereby shall, to the extent   permitted by applicable law, be amortized, prorated, allocated and spread in equal parts     

 

        throughout the full term of this Note, so that the interest rate is uniform throughout the   full term of this Note.   If any word, phrase, clause, paragraph, part, portion or provision hereof is held to be   invalid, the remainder hereof shall nevertheless be valid as though it had been entered   into without such invalid word, phrase, clause, paragraph, part, portion or provision.   8. Payments.  Principal and accrued interest shall be due and payable as follows:   (a) Interest shall be due and payable quarterly as it accrues on the unpaid principal   balance to the date of each installment, payment beginning December 31, 2014,   and continuing on March 31, 2015 and June 30, 2015.   (b) On September 30, 2015, the remaining balance, including outstanding principal   and accrued but unpaid interest, then remaining unpaid on this Note shall be due   and payable.   This Note is a revolving line of credit promissory note having an original principal   commitment amount of $8,000,000.00.  The unpaid principal balance of this Note at any   time shall be the total of all amounts loaned or advanced by the holder hereof less the   amount of all payments or prepayments of principal made hereon by or for Borrower.    Borrower may use all or any part of the credit provided for herein at any time before   September 30, 2015.  Borrower may borrow, repay and reborrow hereunder and there is   no limitation on the number of advances made hereunder so long as the total unpaid   principal balance, at any time outstanding, does not exceed $8,000,000.00.   Unless otherwise agreed to, in writing, or otherwise required by applicable law, payments   will be applied first to accrued, unpaid interest, and any remaining amount to any unpaid   collection costs, late charges and other charges and the balance to the principal in inverse   order of maturity, provided, however, during the continuance of an Event of Default,   Lender reserves the right to apply payments among principal, interest, late charges,   collection costs and other charges at its discretion.  The Borrower may at any time pay   the full amount or any part of this Note without the payment of any premium or fee.   9. Security.  This Note and any substitutions, replacements, modifications, renewals and/or   extensions thereof is secured by (a) a Deed of Trust, Mortgage, Security Agreement,   Assignment of Production and Financing Statement dated as of the date of this Note from   Borrower for the benefit of Lender (as amended, restated, supplemented or otherwise   modified from time to time, “Deed of Trust”) covering oil and gas leases, lands and other   properties along with equipment located thereon and proceeds derived therefrom located   in Roosevelt County, Montana, (b) a Pledge Agreement dated to be effective as of the   date of this Note from Guarantor for the benefit of Lender (as amended, restated,   supplemented or otherwise modified from time to time, “Pledge Agreement” and when   taken with the Deed of Trust, hereinafter referred to collectively as the    Security Documents”) covering Guarantor’s membership interest in Borrower and (c) an   Unlimited Guaranty dated as of the date of this Note from Guarantor for the benefit of   Lender (“Guaranty”).  Additionally, this Note is subject to the terms and conditions of the     

 

        Loan Agreement as set out above. Failure to describe all or part of the security shall not   be considered as a waiver of such security.   10. Default.  At the option of the owner or holder hereof, all amounts due and unpaid   hereunder shall be accelerated and shall become immediately due and payable upon the   occurrence and during the continuance of any Events of Default under Section 4.1 of the   Deed of Trust.  During the continuance of an Event of Default, Lender may exercise any   other available remedies, and failure to exercise any remedy shall not constitute a waiver   at any other time including, but not limited to, to the extent permitted by applicable law,   the right to setoff all of Borrower’s accounts with Lender (whether checking, savings, or   some other account).   11. Cost and Expenses.  In addition to all outstanding principal and accrued but unpaid   interest on this Note, the Borrower agrees to pay (a) all reasonable costs and expenses   incurred by all owners and holders of this Note in any probate, reorganization,   bankruptcy or any other proceedings for the establishment or collection or any amount   hereunder, or in collecting this Note through any such proceedings, and (b) reasonable   out-of-pocket attorney’s fees when and if this Note is placed in the hands of an attorney   for collection during the continuance of an Event of Default, in each case except to the   extent resulting from the gross negligence, willful misconduct or fraud of Lender.   12. Waiver of Notice.  Except as expressly set forth in any Loan Document, the Borrower    waives notice (including, but not limited to, notice of intent to accelerate and notice of   acceleration), demand, presentment for payment, protest and the filing of suit for the   purpose of fixing liability and consent that the time of payment hereof may be extended   and re-extended from time to time without notice to it, and they agree that its liability on   or with respect to this Note shall not be affected by any release of or change in any   security at any time existing or by any failure to perfect or to maintain perfection of any   lien on or security interest in any such security.   13. Optional Acceleration Upon Transfer.  If all or any part of the property securing this Note   or any interest in it is sold or transferred in violation of the Loan Documents without   Lender’s prior written consent, Lender may, at its option, require immediate payment in   full of all sums secured by the Security Documents securing this Note.  However, this   option shall not be exercised by Lender if exercise is prohibited by state or federal law as   of the date of this Note and the Security Documents.   14. Lender’s Right to Sell.  Lender reserves the right, exercisable in Lender’s sole discretion   and, with respect to participations only, without notice to Borrower or any other person,   to sell participations, to assign its interest or both, in all or any part of this Note or the   debt evidenced by this Note.          

 

        15. Obligations of Borrower Under This Note.  When this instrument is executed by more   than one person, corporation or other legal entity, it shall be construed as though   “Borrower” were written “Borrowers” and as though the pronouns and verbs in their   number were changed to correspond; and in such case, each of the Borrowers shall be   bound jointly and severally with one another to keep, observe and perform the covenants,   agreements, obligations and liabilities imposed by this instrument upon the “Borrower.”   16. Governing Law.  WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW,   THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH   AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS APPLICABLE TO   CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE   OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA BUT IN   ANY EVENT CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH   REGULATES CERTAIN REVOLVING LOAN ACCOUNTS AND REVOLVING   TRIPARTY ACCOUNTS) SHALL NOT APPLY TO THE LOAN EVIDENCED BY   THIS NOTE AND EXCEPT THAT TO THE EXTENT THAT THE LAW OF   ANOTHER STATE IN WHICH A PORTION OF THE PROPERTY IS LOCATED (OR   WHICH IS OTHERWISE APPLICABLE TO A PORTION OF THE PROPERTY)   NECESSARILY GOVERNS WITH RESPECT TO PROCEDURAL AND   SUBSTANTIVE MATTERS RELATING TO THE CREATION, PERFECTION AND   ENFORCEMENT OF THE LIENS, SECURITY INTERESTS AND OTHER RIGHTS   AND REMEDIES GRANTED HEREIN, THE LAW OF SUCH OTHER STATE   SHALL APPLY AS TO THAT PORTION OF THE PROPERTY LOCATED IN (OR   OTHERWISE SUBJECT TO THE LAWS OF) SUCH STATE. Representations.  The   Borrower warrants and represents to the Lender, and to all other owners and/or holders of   the indebtedness evidenced hereby, that (1) all loans evidenced by this Note are and shall   be “business loans” as such term is used in the Depository Institution Regulation and   Monetary Control Act of 1980 as amended, and (2) such loans are for business,   commercial, investment or similar purposes and not primarily for personal, family,   household or agricultural use as such terms are used in Chapter 1 of the Texas Credit   Code.   THIS LOAN IS PAYABLE IN FULL ON SEPTEMBER 30, 2015, OR UPON   ACCELERATION FOR ANY REASON IN ACCORDANCE WITH THE TERMS OF THE   LOAN DOCUMENTS.  AT MATURITY YOU MUST REPAY THE ENTIRE   OUTSTANDING PRINCIPAL BALANCE OF THE LOAN AND ACCRUED BUT UNPAID   INTEREST THEN DUE.  THE BANK IS UNDER NO OBLIGATION TO REFINANCE THE   LOAN AT THAT TIME.  YOU WILL THEREFORE, BE REQUIRED TO MAKE PAYMENT   OUT OF OTHER ASSETS THAT YOU MAY OWN OR YOU WILL HAVE TO FIND A   LENDER, WHICH MAY BE THE BANK YOU HAVE THIS LOAN WITH, WILLING TO   LEND YOU THE MONEY.  IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY   HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED   WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING FROM THE SAME BANK.          

 

    

 

THIS REVOLVING LINE OF CREDIT NOTE, THE SECURITY D4CUMEI`TTS AND   ACCQMPANYING UCC-1 FINANCING STATEMENTS AND LOAN AGREEMENT   AND/OR ANY AND ALL OTHER DOCUMENTS EXECUTED AT tali NEAR THE   TIME OF EXECUTION OF THIS DOCUMENT CONSTITUTE A "LOAN   AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS &   CQMMERCE CODE, AND REPRESENTS THE FINAL AGREEMENT BETWEEN THE   PARTIES AND MAY NOT SE CONTRADICTED BY EVIDENCE OF PRIOR,   CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.   THERE ARE NO UNWKITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.   DATED to be effective as of the date set out above, although EXECUTED on the dates   set out below.   EXECUTED on this   day of September, 2014   EXECUTED on this _ 0   day of September, 2014   B012R4WER:   NAUTILUS POPLAR LLC, a Montana limited   liability company   By: Magellan Petroleum Corporation, its manager   By:   Antoine Lafargue, Chief Financial Officer   LENDER: (The Lender's signature is provided   as its acknowledgment of the above as the final   written agreement between the parties.)   WEST TEXAS STATE BANK   Les W. Robbins, President-Midland   [$$,000,000 Promissory Note (Revolving Line of Credit Nate)]   C7e10-59magellanwtsbguaran

Executed Version   3401146.4    September 17, 2014   UNLIMITED GUARANTY      “Lender”: West Texas State Bank   1501 W. University   Odessa, Texas  79764   “Borrower”: Nautilus Poplar LLC   1775 Sherman Street, Suite 1950   Denver, Colorado  80203   “Guarantor”: Magellan Petroleum Corporation    1775 Sherman Street, Suite 1950   Denver, Colorado 80203   1. Guaranty.  FOR VALUE RECEIVED, and to induce West Texas State Bank   (“Lender”) to make loans or advances or to extend credit or other financial   accommodations or benefits, with or without security, to or for the account of Borrower   pursuant to the Loan Agreement (as hereinafter defined) and the other Loan Documents   (as hereinafter defined), the undersigned “Guarantor” hereby becomes surety for and   irrevocably and unconditionally guarantees to Lender prompt payment when due,   whether by acceleration or otherwise, of any Liabilities and Obligations (as hereinafter   defined) of Borrower to Lender.  This Unlimited Guaranty (as amended, restated,   supplemented or otherwise modified from time to time, this “Guaranty”) is cumulative to   and does not supersede any other guaranties of any of the Liabilities and Obligations.   This Guaranty is continuing and is unlimited as to all principal plus interest owing at any   time, plus reasonable out-of-pocket attorney’s fees, costs and expenses of collection   incurred and/or the cost of the enforcement of rights in enforcing this Guaranty   (including, without limitation, any liability arising from failure to comply with any state   or federal laws, rules and regulations concerning the control of hazardous waste or   substances at or with respect to any real estate securing any loan guaranteed hereby), plus   interest on such attorney’s fees and cost of collection, during the continuance of an Event   of Default (as defined in the Loan Agreement).   Guarantor unconditionally guarantees the prompt and complete compliance by Borrower   of all Obligations of Borrower (as defined in the Loan Agreement).  The undertakings of   Guarantor hereunder are independent of the Obligations of Borrower and a separate   action or actions for payment, damages or performance may be brought or prosecuted   against Guarantor, whether or not an action is brought against Borrower or to realize   upon the security for the Obligations, whether or not Borrower is joined in any such   action or actions, and whether or not notice is given or demand is made upon Borrower.     

 

       Lender shall not be required to proceed first against Borrower, or any other person or   entity, whether primarily or secondarily liable, or against any collateral held by it, before   resorting to Guarantor for payment, and Guarantor shall not be entitled to assert as a   defense to the enforceability of this Guaranty any defense of Borrower, with respect to   any Liabilities and Obligations.   2. Paragraph Headings, Governing Law and Binding Effect.     A. Guarantor agrees that the paragraph headings in this Guaranty are for convenience   only and that they will not limit any of the provisions of this Guaranty.     B. WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW, THIS   GUARANTY SHALL BE CONSTRUED AND ENFORCED IN   ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE   OF TEXAS APPLICABLE TO CONTRACTS MADE AND TO BE   PERFORMED ENTIRELY WITHIN THE STATE OF TEXAS AND THE   LAWS OF THE UNITED STATES OF AMERICA, EXCEPT THAT TO THE   EXTENT THAT THE LAW OF ANOTHER STATE IN WHICH A PORTION   OF THE PROPERTY IS LOCATED (OR WHICH IS OTHERWISE   APPLICABLE TO A PORTION OF THE PROPERTY) NECESSARILY   GOVERNS WITH RESPECT TO PROCEDURAL AND SUBSTANTIVE   MATTERS RELATING TO THE CREATION, PERFECTION AND   ENFORCEMENT OF THE LIENS, SECURITY INTERESTS AND OTHER   RIGHTS AND REMEDIES GRANTED HEREIN, THE LAW OF SUCH   OTHER STATE SHALL APPLY AS TO THAT PORTION OF THE   PROPERTY LOCATED IN (OR OTHERWISE SUBJECT TO THE LAWS OF)   SUCH STATE.   C. ANY SUIT, ACTION OR PROCEEDING AGAINST GUARANTOR WITH   RESPECT TO THIS GUARANTY OR ANY JUDGMENT ENTERED BY ANY   COURT IN RESPECT HEREOF, MAY BE BROUGHT IN THE COURTS OF   THE STATE OF TEXAS, COUNTY OF ECTOR, OR IN THE UNITED   STATES COURTS LOCATED IN ECTOR COUNTY, TEXAS AND THE   BORROWER HEREBY SUBMITS TO THE NON-EXCLUSIVE   JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH   SUIT, ACTION OR PROCEEDING. GUARANTOR HEREBY   IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY SUIT,   ACTION OR PROCEEDING IN SAID COURT BY THE MAILING THEREOF   BY LENDER BY REGISTERED OR CERTIFIED MAIL, POSTAGE   PREPAID, TO GUARANTOR, AS APPLICABLE, AT THE ADDRESS FOR   NOTICES AS PROVIDED IN THE LOAN AGREEMENT. GUARANTOR   HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY   NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,   ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS   GUARANTY BROUGHT IN THE COURTS LOCATED IN THE STATE OF   TEXAS, COUNTY OF ECTOR, AND HEREBY FURTHER IRREVOCABLY     

 

       WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING   BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN   INCONVENIENT FORUM.   3. Definitions.    A. “Guarantor” shall mean Guarantor.   B. “Loan Agreement” shall mean that certain Loan Agreement dated as of the date of   this Guaranty by and between Borrower, Guarantor and Lender, as amended,   restated, supplemented or otherwise modified from time to time.   C. “Loan Documents” shall have the meaning given in the Loan Agreement.   D. “Liabilities and Obligations” shall mean the following:    (i) the due and prompt payment by Borrower of: (x) the principal of and   interest at the rate specified in the Loan Agreement on the Loans, when and as   due, whether at scheduled maturity, date set for prepayment, by acceleration or   otherwise, and (y) all other monetary obligations of Borrower to Lender under the   Loan Documents, when and as due, including fees, costs, expenses (including,   without limitation, reasonable  out-of-pocket fees and expenses of counsel   incurred by Lender  in enforcing any rights under this Guaranty or any other Loan   Document), contract causes of action and indemnities, whether primary,   secondary, direct or indirect, absolute or contingent, fixed or otherwise  (including   monetary obligations incurred during the pendency of any bankruptcy,   insolvency, receivership or other similar proceeding, regardless of whether   allowed or allowable in such proceeding); and   (ii) the due and prompt performance of all covenants, agreements,   obligations and liabilities of Borrower and Guarantor under or in respect of the   Loan Documents.   E. “Note” shall mean that certain Promissory Note (Revolving Line of Credit Note)   dated as of the date of this Guaranty by and between Borrower and Lender having   an original principal commitment amount of $8,000,000.00, as amended, restated,   supplemented or otherwise modified from time to time.   4. Waivers by Guarantor.  Except as expressly set forth in any Loan Agreement,   Guarantor waives notice of acceptance of this Guaranty, notice of any Liabilities and   Obligations to which it may apply, presentment, demand for payment, protest, notice of   dishonor or nonpayment of any Liabilities and Obligations, notice of intent to accelerate,   notice of acceleration, and notice of any suit or the taking of other action by Lender   against Borrower or any other person (other than Guarantor), any applicable statute of   limitations and any other notice to any party liable on any Loan Document (other than   Guarantor).     

 

       Guarantor also hereby waives, until payment in full of the Liabilities and Obligations   (other than contingent indemnification obligations for which no claim has been asserted),   any claim, right or remedy which such Guarantor may now have or hereafter acquire   against Borrower that arises hereunder and/or from the performance by any other   Guarantor hereunder including, without limitation, any claim, remedy or right of   subrogation, reimbursement, exoneration, contribution, indemnification, or participation   in any claim, right or remedy of Lender against Borrower or against any security which   Lender now has or hereafter acquires, whether or not such claim, right or remedy arises   in equity, under contract, by statute, under common law or otherwise.   Guarantor also waives the benefits of any provision of law requiring that Lender exhaust   any right or remedy, or take any action, against Borrower, any Guarantor, any other   person and/or property including but not limited to the provisions of the Texas Civil   Practice and Remedies Code §17.001, Texas Rules of Civil Procedure Rule 31 and the   Texas Business and Commerce Code Chapter 34, as amended, or otherwise.   Lender may at any time and from time to time without notice to Guarantor (except as   required by law), without incurring responsibility to Guarantor, without impairing,   releasing or otherwise affecting the Liabilities and Obligations of Guarantor, in whole or   in part, and without the indorsement or execution by Guarantor of any additional consent,   waiver or guaranty:  (a) change the manner, place or terms of payment, or change or   extend the time of or renew, or change any interest rate or alter any Liabilities and   Obligations or installment thereof, or any security therefor (other than the Pledged   Collateral); (b) loan additional monies or extend additional credit to Borrower under the   Loan Documents, with or without security, thereby creating new Liabilities and   Obligations the payment or performance of which shall be guaranteed hereunder, and this   Guaranty herein made shall apply to the Liabilities and Obligations as so changed,   extended, surrendered, realized upon or otherwise altered; (c) during the continuance of   an Event of Default, sell, exchange, release, surrender, realize upon or otherwise deal   with in any manner and in any order any property at any time pledged or mortgaged to   secure the Liabilities and Obligations and any offset there against; (d) exercise or refrain   from exercising any rights against Borrower or others (including Guarantor) or act or   refrain from acting in any other manner, in each case in accordance with the terms of the   Loan Documents; (e) settle or compromise any Liabilities and Obligations or any security   therefor and subordinate the payment of all or any part thereof to the payment of any   Liabilities and Obligations of any other parties primarily or secondarily liable on any of   the Liabilities or Obligations; (f) release or compromise any Liabilities and Obligations   of Guarantor hereunder or any Liabilities and Obligations of any other parties primarily   or secondarily liable on any of the Liabilities and Obligations; or (g) apply any sums   from any sources to any Liabilities and Obligations without regard to any Liabilities and   Obligations remaining unpaid in accordance with the terms of the Loan Documents.   5. Subordination.  Guarantor agrees that it will not demand, take or receive from Borrower,   by set-off or in any other manner, payment of any debt, now and at any time or times   hereafter owing by Borrower to Guarantor unless there are no then outstanding Loans.     

 

       6. Waivers by Lender.  No delay on the part of Lender in exercising any of its options,   powers or rights, and no partial or single exercise thereof, shall constitute a waiver   thereof.  No waiver of any of its rights hereunder, and no modification or amendment of   this Guaranty, shall be deemed to be made by Lender unless the same shall be in writing,   duly signed on behalf of Lender; and each such waiver, if any, shall apply only with   respect to the specific instance involved, and shall in no way impair the rights of Lender   or the obligations of Guarantor to Lender in any other respect at any other time.   7. Termination.  This Guaranty shall be binding on Guarantor until the earlier of (i)   termination of the Loan Agreement and (ii) written notice of revocation signed by   Guarantor and approved in writing by Lender in its sole and absolute discretion,   notwithstanding change in name, location, composition or structure of, or the dissolution,   termination or increase, decrease or change in personnel, owners or partners of Borrower   or Guarantor.  No notice of revocation or termination hereof shall affect in any manner   rights arising under this Guaranty with respect to Liabilities or Obligations that shall have   been committed, created, contracted, assumed or incurred prior to receipt of such written   notice pursuant to any agreement entered into by Lender prior to receipt of such notice.   .      8.  Partial Invalidity and/or Enforceability of Guaranty.  The unenforceability or   invalidity of any provision of this Guaranty shall not affect the enforceability or validity   of any other provision herein and the invalidity or unenforceability of any provision of   any Loan Document as it may apply to any person or circumstance shall not affect the   enforceability or validity of such provision as it may apply to other persons or   circumstances.   In the event Lender is required to relinquish or return any payments, the Pledged   Collateral or the proceeds thereof, in whole or in part, which had been previously applied   to or retained for application against any Liabilities and Obligations, by reason of a   proceeding arising under Title 11 of the United States Code, as amended, or any similar   federal or state law for the relief of debtors , this Guaranty shall automatically continue to   be effective notwithstanding any previous cancellation or release effected by Lender to   the extent of such relinquished or returned payments, Pledged Collateral and/or proceeds.    9. Change of Status.  Guarantor will not become a party to a merger or consolidation with   any other company, except where Guarantor is the surviving corporation or entity, and all   covenants under this Guaranty are assumed by the surviving entity.  Further, Guarantor   may not change its legal structure, without the written consent of Lender and all   covenants under this Guaranty are assumed by the new or surviving entity.  Guarantor   further agrees that this Guaranty shall be binding, legal and enforceable against   Guarantor in the event Borrower changes its name, status or type of entity.   10. Financial and Other Information.  Guarantor agrees to furnish to Lender financial   statements as set out in the Loan Agreement and any and all other financial information   and any other information regarding Guarantor and/or the Pledged Collateral reasonably   requested in writing by Lender within ten (10) Business Days of the date of such request.    Guarantor has made an independent investigation of the financial condition and affairs of     

 

       Borrower prior to entering into this Guaranty, and Guarantor will continue to make such   investigation; and in entering into this Guaranty Guarantor has not relied upon any   representation of Lender as to the financial condition, operation or creditworthiness of   Borrower.  Guarantor further agrees that Lender shall have no duty or responsibility now   or hereafter to make any investigation or appraisal of Borrower on behalf of Guarantor or   to provide Guarantor with any credit or other information which may come to its   attention now or hereafter.   11. Notices.  Notices given under this Guaranty shall be given in accordance with Section 10   {Notices} of the Loan Agreement.   12. Guarantor Duties.  Guarantor shall upon notice or demand by Lender promptly and with   due diligence pay and perform all Liabilities and Obligations for the benefit of Lender in   the event of the occurrence and continuance of any Event of Default under any Loan   Documents.    13. Remedies.  During the continuance of an Event of Default as a result of Guarantor failing   to fulfill its duty to pay and perform all Liabilities and Obligations as required hereunder,   Lender shall have all of the remedies of a creditor and, to the extent applicable, of a   secured party, under all applicable law, and without limiting the generality of the   foregoing, Lender may, at its option and without notice or demand:  (a) declare any   Liabilities and Obligations due and payable at once; (b) take possession of the Pledged   Collateral and/or any collateral pledged by Borrower wherever located, and sell, resell,   assign, transfer and deliver all or any part of the Pledged Collateral and/or said collateral   of Borrower at any public or private sale or otherwise dispose of any or all of the Pledged   Collateral and/or such collateral of Borrower in its then condition, for cash or on credit or   for future delivery, and in connection therewith Lender may impose reasonable   conditions upon any such sale, and Lender, unless prohibited by law the provisions of   which cannot be waived, may purchase all or any part of the Pledged Collateral and/or   said collateral of Borrower to be sold, free from and discharged of all trusts, claims,   rights or redemption and equities of Borrower or Guarantor whatsoever; Guarantor   acknowledges and agrees that the sale of the Pledged Collateral and/or any collateral of   Borrower through any nationally recognized broker-dealer, investment banker or any   other method common in the securities industry shall be deemed a commercially   reasonable sale under the applicable uniform commercial code or any other equivalent   statute or federal law, and expressly waives notice thereof except as provided herein or in   any other Loan Document; and (c) set-off against the Liabilities and Obligations of   Guarantor all money owed by Lender or any of its affiliates in any capacity to Guarantor   whether or not due.    14.  Attorney Fees, Cost and Expenses.  Guarantor shall pay all costs of collection and   reasonable out-of-pocket attorney’s fees, including reasonable out-of-pocket attorney’s   fees in connection with any suit, mediation or arbitration proceeding, out of court   payment agreement, trial, appeal, bankruptcy proceedings or otherwise, in each case   incurred or paid by Lender in enforcing the payment of any Liabilities and Obligations     

 

       during the continuance of an Event of Default in accordance with the terms hereof and   the other Loan Documents or defending this Guaranty.   15. Collateral.  In accordance with the terms of the Loan Agreement, Lender shall have the   right to require Guarantor to deliver to Lender, as security for the Liabilities and   Obligations, a pledge of all of its right, title and interest in and to all membership interests   of Guarantor in Borrower and the certificates, instruments and agreements representing   such interests (the “Pledged Collateral”).    16. Preservation of Property.  Lender shall not be bound to take any steps necessary to   preserve any rights in any property pledged as collateral to Lender to secure Borrower   and/or Guarantor’s Liabilities and Obligations as against prior parties who may be liable   in connection therewith.  Lender, nevertheless, at any time, may during the continuance   of an Event of Default (a) take any action it deems appropriate for the care or   preservation of such property or of any rights of Borrower and/or Guarantor or Lender   therein; (b) demand, sue for, collect or receive any money or property at any time due,   payable or receivable on account of or in exchange for any property pledged as collateral   to Lender to secure Borrower and/or Guarantor’s Liabilities and Obligations to Lender;   (c) compromise and settle with any person liable on such property; or (d) extend the time   of payment or otherwise change the terms of the Loan Documents as to any party liable   on the Loan Documents, all without notice to, without incurring responsibility to, and   without affecting any of the Liabilities and Obligations of Guarantor.   17. Loan Agreement.  This Guaranty is subject to the terms and conditions of the Loan   Agreement.  All capitalized terms used but not defined herein shall have the meanings   given such terms in the Loan Agreement.      [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]      (signature page follows)         

 

NOTTC~   T~IIS GUARANTY, TI.iE NOTE, THE SECURXTY ll()CUN.~~N'TS ANU TIME   ACCOM~ANYiI~IG UCC-1 ~'INANCZ:NG STAT~MCNT AND LOAN AGREEMENT   ANU/UR ANl' A1VD ALL O'T'HCR LOAN DOCUMENTS EX~CUTLD AT 4R NEAR   THE T[N[i E OF THE E~i~CUTION OF THIS A4CUMENT COI~ISTTTUTE A "LOA1V   AGRE~MEi~T" AS AET+INEll IN SECTION 2f.02(a) nF TI-I.E TEXAS BUSINESS &   C0~1'~MrXtCE C~l3L", AND REPRESENTS THE FINAL AGREEA4ENT BE'~'WE~N THE   PA~Z.'i'XES ANU A'~.E1.Y SOT B~ CONTRADICTED XiY EVIDLNC~ Off' PRIOR,   CC}NTEMPdTtANEUUS OR SUBSEQUEiVT ORAL AGKE~M~N'7'S Off' THE PARTIES.   THERE ARE NO UNWRITTEN ORAL AGRCEMENTS BETVVCLN THE ~'.~.RTIES.   This Guaranty is dated to be effective as of September j~, 2014, although it is executed   on the dates set aut below.   GUARANTOR:   MAGELLAN PETROLCUM COR~'gRA.TION,   a Dellware orporatio   EXECUTED on this ~,~_ By:   day o~September; 2014 A►~toine La~~rgiae, Chief Finaucia~ (~f.~cer   LENDER: (Tlxe Lenders sig~~atare is pt•ovided   as its acknor~vledgn~ent of the above as the final   ~vrittera agreement bef~veeu the parties.)   WEST TEXAS STATE BANK   _ ,~~~ ~-   ~XECUTBD ozi Phis ~ Sy: '°~'~   day oi'Septeziat~e~~, 2014 Les W. Robbi~~s, ~'zesxdent-Midland   [Unlimited Guaranty)

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