Document:

Exhibit 10.2

 

AMENDED AND RESTATED GUARANTY

 

THIS AMENDED AND RESTATED GUARANTY is made as of December 28, 2012, by SUNDANCE ENERGY AUSTRALIA LIMITED (ACN 112 202 883), a company organized under the laws of South Australia (“Guarantor”), in favor of WELLS FARGO BANK, N.A., individually and as Administrative Agent for the Guaranteed Parties.

 

RECITALS:

 

1.                                     Sundance Energy, Inc., a Colorado corporation (“Borrower”), is executing in favor of Lenders those certain promissory notes of even date herewith, payable to the order of Lenders in the aggregate principal amount of up to $300,000,000 (such promissory notes, as from time to time amended, and all promissory notes given in substitution, renewal or extension therefor or thereof, in whole or in part, being herein collectively called the “Note”).

 

2.                                     The Note is being executed pursuant to a Credit Agreement of even date herewith, (herein, as from time to time amended, supplemented or restated, called the “Credit Agreement”), by and among Borrower, Administrative Agent and Lenders, pursuant to which Lenders have agreed to advance funds to Borrower under the Note, which amends and restates the Original Credit Agreement in its entirety.

 

3.                                     Pursuant to Hedging Contracts, certain Lenders have entered into or may hereafter enter into, or Affiliates of Lenders have entered into or may hereafter enter into, other transactions with Restricted Persons.

 

4.                                      It is a condition precedent to Lenders’ obligations to advance funds and issue letters of credit pursuant to the Credit Agreement and to enter into transactions under Hedging Contracts that Guarantor shall execute and deliver to Administrative Agent a satisfactory guaranty of the Obligations.

 

5.                                     Guarantor owns directly, or indirectly through one or more subsidiaries, one hundred percent (100%) of the outstanding shares of common stock of Borrower.

 

6.                                     Guarantor has executed and delivered that certain Guaranty dated as of July 18, 2011, in favor of Administrative Agent and Lenders (as amended or supplemented to the date hereof, the “Original Guaranty”).

 

7.                                      Guarantor, Administrative Agent and Lenders desire to amend and restate the Original Guaranty by executing and delivering this Guaranty.

 

8.                                    The board of directors of Guarantor has determined that Guarantor’s execution, delivery and performance of this Guaranty may reasonably be expected to benefit Guarantor, directly or indirectly, and are in the best interests of Guarantor.

 

NOW, THEREFORE, in consideration of the premises, of the benefits which will inure to Guarantor from Lenders’ advances of funds to Borrower under the Credit Agreement, and of Ten Dollars and other good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged, and in order to induce Lenders to advance funds and issue letters of credit

 

 

under the Credit Agreement, Guarantor hereby agrees with Administrative Agent, for the benefit of Administrative Agent and Lenders as follows:

 

AGREEMENTS:

 

Section 1.                                          Definitions.                          Reference is hereby made to the Credit Agreement for all purposes. All terms used in this Guaranty which are defined in the Credit Agreement and not otherwise defined herein shall have the same meanings when used herein. All references herein to any Obligation Document, Loan Document, or other document or instrument refer to the same as from time to time amended, supplemented or restated. As used herein the following terms shall have the following meanings:

 

“Administrative Agent” means the Person who, at the time in question, is the “Administrative Agent” under the Credit Agreement. Whenever there is only one Lender under the Credit Agreement, “Administrative Agent” shall also refer to such Lender in such capacity as the only Lender.

 

“Borrower” has the meaning specified in Recital 1.

 

“Credit Agreement” has the meaning specified in Recital 1.

 

“Guaranteed Parties” means Administrative Agent, LC Issuer, Lenders, each Cash Management Lender, each Lender Counterparty and any other Person to which Obligations are owmg.

 

“Lenders” means Wells Fargo Bank, N.A. and all other Persons who at any time are “Lenders” under the Credit Agreement.

 

“Obligations” means collectively all of the indebtedness, obligations, and undertakings which are guaranteed by Guarantor and described in subsections (a) and (b) of Section 2.

 

“Obligation Documents” means this Guaranty, the Note, the Credit Agreement, the Loan Documents, the Hedging Contracts with respect to Lender Hedging Obligations, all other documents and instruments under, by reason of which, or pursuant to which any or all of the Obligations are evidenced, governed, secured, or otherwise dealt with, and all other documents, instruments, agreements, certificates, legal opinions and other writings heretofore or hereafter delivered in connection herewith or therewith.

 

“Obligors” means Borrower, Guarantor and any other endorsers, guarantors or obligors, primary or secondary, of any or all of the Obligations.

 

“Original Guaranty” has the meaning specified in Recital 6.

 

“Original Credit Agreement” means that certain Credit Agreement dated as of July 18, 2011 among Borrower, BOKF, NA dba Bank of Oklahoma, as administrative agent and letter of credit issuer, and certain financial institutions, as lenders, as amended or supplemented to the date hereof.

 

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“Security” means any rights, properties, or interests of Administrative Agent or Lenders, under the Obligation Documents or otherwise, which provide recourse or other benefits to Administrative Agent or Lenders in connection with the Obligations or the non-payment or non-performance thereof, including collateral (whether real or personal, tangible or intangible) in which Administrative Agent or Lenders have rights under or pursuant to any Obligation Documents, guaranties of the payment or performance of any Obligation, bonds, surety agreements, keep-well agreements, letters of credit, rights of subrogation, rights of set off.

 

Section 2.                                           Guaranty.

 

(a)                                 Guarantor hereby irrevocably, absolutely, and unconditionally guarantees to each Guaranteed Party the prompt, complete, and full payment when due, and no matter how the same shall become due, of:

 

(i)                                    The Note, including all principal, all interest thereon and all other sums payable thereunder;

 

(ii)                                  All Lender Hedging Obligations;

 

(iii)                              All Cash Management Obligations; and

 

(iv)                              All other sums payable under the other Obligation Documents, whether for principal, interest, fees or otherwise.

 

Without limiting the generality of the foregoing, Guarantor’s liability hereunder shall extend to and include all post-petition interest, expenses, and other duties and liabilities of each Restricted Person described above in this subsection (a), or below in the following subsection (b), which would be owed by such Restricted Person but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization, or similar proceeding involving a Restricted Person.

 

(b)                                 Guarantor hereby irrevocably, absolutely, and unconditionally guarantees to Administrative Agent and each Lender the prompt, complete and full performance, when due, and no matter how the same shall become due, of all obligations and undertakings of the Restricted Persons to Administrative Agent or such Lender under, by reason of, or pursuant to any of the Obligation Documents.

 

(c)                                  If any Restricted Person shall for any reason fail to pay any Obligation, as and when such Obligation shall become due and payable, whether at its stated maturity, as a result of the exercise of any power to accelerate, or otherwise, Guarantor will, upon demand by Administrative Agent, pay such Obligation in full to Administrative Agent for the benefit of Administrative Agent or the Lender to whom such Obligation is owed. If any Restricted Person shall for any reason fail to perform promptly any Obligation, Guarantor will, upon demand by Administrative Agent, cause such Obligation to be performed or, if specified by Administrative Agent, provide sufficient funds, in such amount and manner as Administrative Agent shall in good faith determine, for the prompt, full and faithful performance of such Obligation by Administrative Agent or such other Person as Administrative Agent shall designate.

 

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(d)                                If any Restricted Person or Guarantor fails to pay or perform any Obligation as described in the immediately preceding subsections (a), (b), or (c) Guarantor will incur the additional obligation to pay to Administrative Agent, and Guarantor will forthwith upon demand by Administrative Agent pay to Administrative Agent, the amount of any and all reasonable expenses, including fees and disbursements of Administrative Agent’s counsel that are not employees of Administrative Agent or any Affiliate of Administrative Agent and of any experts or agents retained by Administrative Agent, which Administrative Agent may incur as a result of such failure.

 

(e)                                 As between Guarantor and Administrative Agent or Lenders, this Guaranty shall be considered a primary and liquidated liability of Guarantor.

 

Section 3.                                          Unconditional Guaranty.

 

(a)                               No action which Administrative Agent or any Lender may take or omit to take in connection with any of the Obligation Documents which does not violate the terms thereof, any of the Obligations (or any other indebtedness owing by Borrower to Administrative Agent or any Lender), or any Security, and no course of dealing of Administrative Agent or any Lender with any Obligor or any other Person, shall release or diminish Guarantor’s obligations, liabilities, agreements or duties hereunder, affect this Guaranty in any way, or afford Guarantor any recourse against Administrative Agent or any Lender, regardless of whether any such action or inaction may increase any risks to or liabilities of Administrative Agent or any Lender or any Obligor or increase any risk to or diminish any safeguard of any Security. Without limiting the foregoing, Guarantor hereby expressly agrees that Administrative Agent and Lenders may, from time to time, without notice to or the consent of Guarantor, do any or all of the following:

 

(i)                                    Amend, change or modify, in whole or in part, any one or more of the Obligation Documents and give or refuse to give any waivers or other indulgences with respect thereto.

 

(ii)                                 Neglect, delay, fail, or refuse to take or prosecute any action for the collection or enforcement of any of the Obligations, to foreclose or take or prosecute any action in connection with any Security or Obligation Document, to bring suit against any Obligor or any other Person, or to take any other action concerning the Obligations or the Obligation Documents.

 

(iii)                              Accelerate, change, rearrange, extend, or renew the time, rate, terms, or manner for payment or performance of any one or more of the Obligations (whether for principal, interest, fees, expenses, indemnifications, affirmative or negative covenants, or otherwise).

 

(iv)                              Compromise or settle any unpaid or unperformed Obligation or any other obligation or amount due or owing, or claimed to be due or owing, under any one or more of the Obligation Documents.

 

(v)                                Take, exchange, amend, eliminate, surrender, release, or subordinate any or all Security for any or all of the Obligations, accept additional or substituted

 

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Security therefor, and perfect or fail to perfect Administrative Agent’s or Lenders’ rights in any or all Security.

 

(vi)                             Discharge, release, substitute or add Obligors.

 

(vii)                          Apply all monies received from Obligors or others, or from any Security for any of the Obligations, as Administrative Agent or Lenders may determine to be in their best interest, without in any way being required to marshall Security or assets or to apply all or any part of such monies upon any particular Obligations.

 

(b)                                No action or inaction of any Obligor or any other Person, and no change of law or circumstances, shall release or diminish Guarantor’s obligations, liabilities, agreements, or duties hereunder, affect this Guaranty in any way, or afford Guarantor any recourse against Administrative Agent or any Lender. Without limiting the foregoing, the obligations, liabilities, agreements, and duties of Guarantor under this Guaranty shall not be released, diminished, impaired, reduced, or affected by the occurrence of any or all of the following from time to time, even if occurring without notice to or without the consent of Guarantor:

 

(i)                                     Any voluntary or involuntary liquidation, dissolution, sale of all or substantially all assets, marshalling of assets or liabilities, receivership, conservatorship, assignment for the benefit of creditors, insolvency, bankruptcy, reorganization, arrangement, or composition of any Obligor or any other proceedings involving any Obligor or any of the assets of any Obligor under laws for the protection of debtors, or any discharge, impairment, modification, release, or limitation of the liability of, or stay of actions or lien enforcement proceedings against, any Obligor, any properties of any Obligor, or the estate in bankruptcy of any Obligor in the course of or resulting from any such proceedings.

 

(ii)                                 The failure by Administrative Agent or any Lender to file or enforce a claim in any proceeding described in the immediately preceding subsection (i) or to take any other action in any proceeding to which any Obligor is a party.

 

(iii)                              The release by operation of law of any Obligor from any of the Obligations or any other obligations to Administrative Agent or any Lender.

 

(iv)                             The invalidity, deficiency, illegality, or unenforceability of any of the Obligations or the Obligation Documents, in whole or in part, any bar by any statute of limitations or other law of recovery on any of the Obligations, or any defense or excuse for failure to perform on account of force majeure, act of God, casualty, impossibility, impracticability, or other defense or excuse whatsoever.

 

(v)                                The fact that Guarantor may have incurred directly part of the Obligations or is otherwise primarily liable therefor.

 

(vi)                             Without limiting any of the foregoing, any fact or event (whether or not similar to any of the foregoing) which in the absence of this provision would or might constitute or afford a legal or equitable discharge or release of or defense to a

 

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guarantor or surety other than the actual payment and performance by Guarantor under this Guaranty.

 

(c)                                 This is a guaranty of payment and not of collection. Administrative Agent and Lenders may invoke the benefits of this Guaranty before pursuing any remedies against any Obligor or any other Person and before proceeding against any Security now or hereafter existing for the payment or performance of any of the Obligations. Administrative Agent and Lenders may maintain an action against Guarantor on this Guaranty without joining any other Obligor therein and without bringing a separate action against any other Obligor.

 

(d)                                 If any payment to Administrative Agent or any Lender by any Obligor is held to constitute a preference or a voidable transfer under applicable state or federal laws, or if for any other reason Administrative Agent or any Lender is required to refund such payment to the payor thereof or to pay the amount thereof to any other Person, such payment to Administrative Agent or such Lender shall not constitute a release of Guarantor from any liability hereunder, and Guarantor agrees to pay such amount to Administrative Agent or such Lender on demand and agrees and acknowledges that this Guaranty shall continue to be effective or shall be reinstated, as the case may be, to the extent of any such payment or payments. Any transfer by subrogation which is made as contemplated in Section 6 prior to any such payment or payments shall (regardless of the terms of such transfer) be automatically voided upon the making of any such payment or payments, and all rights so transferred shall thereupon revert to and be vested in Administrative Agent and Lenders.

 

(e)                                  This is a continuing guaranty and shall apply to and cover all Obligations and renewals and extensions thereof and substitutions therefor from time to time.

 

Section 4.                                         Waiver.                      Guarantor hereby waives, with respect to the Obligations, this Guaranty, and the other Obligation Documents:

 

(a)                                notice of the incurrence of any Obligation by any Restricted Person, and notice of any kind concerning the assets, liabilities, financial condition, creditworthiness, businesses, prospects, or other affairs of any Restricted Person (it being understood and agreed that: (i) Guarantor shall take full responsibility for informing itself of such matters, (ii) neither Administrative Agent nor any other Guaranteed Party shall have any responsibility of any kind to inform Guarantor of such matters, and (iii) Guaranteed Parties are hereby authorized to assume that Guarantor, by virtue of its relationships with Borrower which are independent of this Guaranty, has full and complete knowledge of such matters whenever Guaranteed Parties extend credit to any Restricted Person or take any other action which may change or increase Guarantor’s liabilities or losses hereunder).

 

(b)                                notice that Administrative Agent, any Lender, any Obligor, or any other Person has taken or omitted to take any action under any Obligation Document or any other agreement or instrument relating thereto or relating to any Obligation.

 

(c)                                 default, demand, presentment for payment, and notice of default, demand, dishonor, nonpayment, or nonperformance.

 

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(d)                                notice of intention to accelerate, notice of acceleration, protest, notice of protest, notice of any exercise ofremedies (as described in the following Section 5 or otherwise), and all other notices of any kind whatsoever.

 

Section 5.                                         Exercise of Remedies.   Administrative Agent shall have the right to enforce, from time to time, in any order and at Administrative Agent’s sole discretion, any rights, powers and remedies which Administrative Agent or Lenders may have under the Obligation Documents or otherwise, including judicial foreclosure, the exercise of rights of power of sale, the taking of a deed or assignment in lieu of foreclosure, the appointment of a receiver to collect rents, issues and profits, the exercise of remedies against personal property, or the enforcement of any assignment of leases, rentals, oil or gas production, or other properties or rights, whether real or personal, tangible or intangible; and Guarantor shall be liable to Administrative Agent and each Lender hereunder for any deficiency resulting from the exercise by Administrative Agent of any such right or remedy even though any rights which Guarantor may have against Borrower or others may be destroyed or diminished by exercise of any such right or remedy. No failure on the part of Administrative Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under any other Obligation Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights, powers and remedies of Administrative Agent and each Lender provided herein and in the other Obligation Documents are cumulative and are in addition to, and not exclusive of, any other rights, powers or remedies provided by law or in equity. The rights of Administrative Agent and each Lender hereunder are not conditional or contingent on any attempt by Administrative Agent or any Lender to exercise any of its rights under any other Obligation Document against any Obligor or any other Person.

 

Section 6.                                         Limited Subrogation.

 

(a)                                Until all of the Obligations have been paid and performed in full Guarantor shall have no right to exercise any right of subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which it may now or hereafter have against or to any Obligor or any Security in connection with this Guaranty, and Guarantor hereby waives any rights to enforce any remedy which Guarantor may have against any Restricted Person and any right to participate in any Security until such time. If any amount shall be paid to Guarantor on account of any such subrogation or other rights, any such other remedy, or any Security at any time when all of the Obligations and all other expenses guaranteed pursuant hereto shall not have been paid in full, such amount shall be held in trust for the benefit of Administrative Agent, shall be segregated from the other funds of Guarantor and shall forthwith be paid over to Administrative Agent to be held by Administrative Agent as collateral for, or then or at any time thereafter applied in whole or in part by Administrative Agent against, all or any portion of the Obligations, whether matured or unmatured, in such order as Administrative Agent shall elect.

 

(b)                                 If Guarantor shall make payment to Administrative Agent of all or any portion of the Obligations and if all of the Obligations shall be finally paid in full in cash, Administrative Agent will, at Guarantor’s request and expense, execute and deliver to Guarantor (without recourse, representation or warranty) appropriate documents necessary to evidence the transfer by subrogation to Guarantor of an interest in the Obligations resulting from such payment by Guarantor; provided that such transfer shall be subject to Section 3(d) above and that without the

 

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consent of Administrative Agent (which Administrative Agent may withhold in its discretion) Guarantor shall not have the right to be subrogated to any claim or right against any Obligor which has become owned by Administrative Agent or any Lender, whose ownership has otherwise changed in the course of enforcement of the Obligation Documents.

 

Section 7.                                           Successors and Assigns. Guarantor’s rights or obligations hereunder may not be assigned or delegated, but this Guaranty and such obligations shall pass to and be fully binding upon the successors of Guarantor, as well as Guarantor. This Guaranty shall apply to and inure to the benefit of Administrative Agent and Lenders and their successors or assigns who acquire their interests in accordance with the assignment provisions of the Credit Agreement. Without limiting the generality of the immediately preceding sentence, Administrative Agent and each Lender may assign, grant a participation in, or otherwise transfer any Obligation held by it or any portion thereof, and Administrative Agent and each Lender may assign or otherwise transfer its rights or any portion thereof under any Obligation Document, to any other Person, and such other Person shall thereupon become entitled to all of the benefits in respect thereof granted to Administrative Agent or such Lender hereunder unless otherwise expressly provided by Administrative Agent or such Lender in connection with such assignment or transfer.

 

Section 8.                                           Subordination and Set Off. Guarantor hereby subordinates and makes inferior to the Obligations any and all indebtedness now or at any time hereafter owed by Restricted Persons to Guarantor. Guarantor agrees that after the occurrence and during the continuance of any Event of Default (including the commencement and continuation of any proceeding under any Debtor Relief Law relating to any Restricted Person) it will neither permit any Restricted Person to repay such indebtedness or any part thereof nor accept payment from any Restricted Person of such indebtedness or any part thereof without the prior written consent of Administrative Agent. If Guarantor receives any such payment without the prior written consent of Administrative Agent, the amount so paid shall be held in trust for the benefit of Lenders, shall be segregated from the other funds of Guarantor, and shall forthwith be paid over to Administrative Agent to be held by Administrative Agent as collateral for, or then or at any time thereafter applied in whole or in part by Administrative Agent against, all or any portions of the Obligations, whether matured or unmatured, in such order as Administrative Agent shall elect. In any proceeding under any Debtor Relief Law relating to any Restricted Person, the Guaranteed Parties shall be entitled to receive payment in full in cash of all Obligations (including all interest and expenses accruing after the commencement of a proceeding under any Debtor Relief Law, whether or not constituting an allowed claim in such proceeding) before Guarantor receives payment of any Subordinated Obligation.

 

If an Event of Default shall have occurred and be continuing, each Guaranteed Party is hereby authorized at any time and from time to time after obtaining the prior written consent of Administrative Agent, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Guaranteed Party to or for the credit or the account of Guarantor against any and all of the obligations of Guarantor now or hereafter existing under this Guaranty to such Guaranteed Party. The rights of each Guaranteed Party under this Section are in addition to other rights and remedies (including other rights of set off) that such Guaranteed Party may have.

 

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Section 9.                                         Representations and Warranties. Guarantor hereby represents  and warrants to Administrative Agent and each Lender as follows:

 

(a)                                 The Recitals at the beginning of this Guaranty are true and correct in all respects.

 

(b)                                 Guarantor is an entity duly organized, validly existing and in good standing under the laws of the state of its organization as set forth in the Recitals to this Guaranty; and Guarantor has all requisite power and authority to execute, deliver and perform this Guaranty.

 

(c)                                 The execution, delivery and performance by Guarantor of this Guaranty have been duly authorized by all necessary corporate action and do not and will not contravene its certificate or articles of incorporation or bylaws.

 

(d)                                The execution, delivery and performance by Guarantor of this Guaranty do not and will not contravene any law or governmental regulation or any material contractual restriction binding on or affecting Guarantor or any of its Affiliates or properties, and do not and will not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties.

 

(e)                                 No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory body or third party is required for the due execution, delivery and performance by Guarantor of this Guaranty, other than reporting requirements to the ASX, with which Guarantor agrees to comply.

 

(f)                                   This Guaranty is a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms except as limited by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors’ rights and general principles of equity.

 

(g)                                 There is no action, suit or proceeding pending or, to the knowledge of Guarantor, threatened against or otherwise affecting Guarantor before any court, arbitrator or governmental department, commission, board, bureau, agency or instrumentality which may materially and adversely affect Guarantor’s financial condition or its ability to perform its obligations hereunder.

 

(h)                                The direct or indirect value of the consideration received and to be received by Guarantor in connection herewith is reasonably worth at least as much as the liability and obligations of Guarantor hereunder, and the incurrence of such liability and obligations in return for such consideration may reasonably be expected to benefit Guarantor, directly or indirectly.

 

(i)                                    Each representation and warranty made by Borrower with respect to Guarantor in any other Loan Document is correct in all material respects (expect that such materiality qualifier shall not be applicable to any representation or warranty that already is qualified or modified by materiality in the text thereof).

 

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Section 10.                           Covenants.

 

(a)                                General. Guarantor will, so long as any Obligation shall remain unpaid, any letter of credit shall be outstanding, or any Guaranteed Party shall have any Commitment, perform and observe, and cause each of its Subsidiaries to perform and observe, all of the terms, covenants and agreements in the Obligation Documents on its or their part to be performed or observed or that the Borrower has agreed to cause Guarantor or such Subsidiaries to perform.

 

(b)                                Indebtedness. Guarantor will not in any manner owe or be liable for Indebtedness except the Obligations and the guarantee of Indebtedness under the Second Lien Credit Facility in an amount not to exceed $30,000,000 at any one time outstanding.

 

Section 11.                                  No Oral Change. No amendment of any provision of this Guaranty shall be effective unless it is in writing and signed by Guarantor and Lenders, and no waiver of any provision of this Guaranty, and no consent to any departure by Guarantor therefrom, shall be effective unless it is in writing and signed by Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

Section 12.                                   Invalidity of Particular Provisions.   If any term or provision of this Guaranty shall be determined to be illegal or unenforceable all other terms and provisions hereof shall nevertheless remain effective and shall be enforced to the fullest extent permitted by applicable law.

 

Section 13.                                   Headings and References. The headings used herein are for purposes of convenience only and shall not be used in construing the provisions hereof. The words “this Guaranty,” “this instrument,” “herein,” “hereof,” “hereby” and words of similar import refer to this Guaranty as a whole and not to any particular subdivision unless expressly so limited. The phrases “this section” and “this subsection” and similar phrases refer only to the subdivisions hereof in which such phrases occur. The word “or” is not exclusive, and the word “including” (in its various forms) means “including without limitation”. Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise reqmres.

 

Section 14.                                    Term. This Guaranty shall be irrevocable until the date (the “Termination Date”) on which (a) all of the Obligations (other than contingent indemnification obligations) have been completely and finally paid and performed, no Lender has any obligation to make any loans or other advances to Borrower, no Lender or LC Issuer has any obligation to pay draws under any Letter of Credit (other than Letters of Credit as to which arrangements satisfactory to the Administrative Agent and LC Issuer have been made), all obligations and undertakings of Borrower under, by reason of, or pursuant to the Obligation Documents have been completely performed, and all Hedging Contracts with respect to Lender Hedging Obligations (other than Lender Hedging Obligations as to which arrangements satisfactory to the Administrative Agent and Lender Counterparty have been made) have been terminated; or (b) the Guarantor has been provided with a written release from its obligations under this Guaranty by the Administrative Agent. This Guaranty is thereafter subject to reinstatement as provided in Section 3(d). All extensions of credit and financial accommodations heretofore or hereafter made by Administrative Agent or Lenders to Borrower shall be conclusively presumed to have been made in acceptance hereof and in reliance hereon.

 

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Section 15.                                  Notices. Any notice or communication required or permitted hereunder shall be given in writing, sent by personal delivery, by telecopy, by delivery service with proof of delivery, or by registered or certified United States mail, postage prepaid, addressed to the appropriate party as follows:

 

To Guarantor:

 

Sundance Energy Australia Limited
 c/o Sundance Energy, Inc.

633 17th Street, Suite 1950

Denver, Colorado 80202
 Attention: Eric P. McCrady
 Facsimile: 303/543-5701

 

Sundance Energy Australia Limited

32 Beulah Road

Norwood, SA, Australia 5067

Attention: Craig Gooden

Facsimile: 08 8132 0766

 

To Administrative Agent:

 

Wells Fargo Bank, N.A.
 1700 Lincoln St., 6th Floor
 Denver, Colorado 80203
 Attention: Oleg Kogan
 Facsimile: 303/863-5367

 

or to such other address or to the attention of such other individual as hereafter shall be designated in writing by the applicable party sent in accordance herewith. Any such notice or communication shall be deemed to have been given (a) in the case of personal delivery or delivery service, as of the date of first attempted delivery at the address or in the manner provided herein, (b) in the case of telecopy, upon receipt, or (c) in the case of registered or certified United States mail, three days after deposit in the mail.

 

Section 16.                                   Limitation on Interest.   Administrative Agent, Lenders and Guarantor intend to contract in strict compliance with applicable usury law from time to time in effect, and the provisions of the Credit Agreement limiting the interest for which Guarantor is obligated are expressly incorporated herein by reference.

 

Section 17.                                  Loan Document.   This Guaranty is a Loan Document, as defined in the Credit Agreement, and is subject to the provisions of the Credit Agreement governing Loan Documents. Guarantor hereby agrees to comply with all of the terms and conditions of the Credit Agreement which are applicable to Guarantor.

 

Section 18.                                   Counterparts; Fax.   This Guaranty may be executed in any number of counterparts, each of which when so executed shall be deemed to constitute one and the same

 

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Guaranty. This Guaranty may be validly executed and delivered by facsimile or other electronic transmission.

 

Section 19.                                  Governing Law; Submission to Process.

 

(a)                                 GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO.

 

(b)                                 SUBMISSION TO JURISDICTION. GUARANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF COLORADO SITTING IN DENVER COUNTY, COLORADO AND OF THE UNITED STATES DISTRICT COURT SITTING IN DENVER, COLORADO, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER OBLIGATION DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURTS OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS GUARANTY OR IN ANY OTHER OBLIGATION DOCUMENT SHALL AFFECT ANY RIGHT THAT ADMINISTRATIVE AGENT, ANY LENDER OR LC ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER OBLIGATION DOCUMENT AGAINST BORROWER OR ANY OTHER RESTRICTED PERSON OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)                                  WAIVER  OF  VENUE. GUARANTOR  IRREVOCABLY  AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER OBLIGATION DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                  SERVICE OF PROCESS. EACH  PARTY  HERETO  IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14. GUARANTOR HEREBY APPOINTS SUNDANCE ENERGY, INC. AS ITS AGENT FOR SERVICE OF PROCESS AT ITS ADDRESS OF 633 1ih STREET, SUITE 1950, DENVER, COLORADO 80202, AND AGREES AND CONSENTS TO SERVICE OF PROCESS ON GUARANTOR BY NOTICE TO SUNDANCE ENERGY, INC. NOTHING IN

 

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THIS GUARANTY WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

Section 20.                                  Waiver of Jury Trial, Punitive Damages, etc. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, (A) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER OBLIGATION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY), AND (B) ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LEGAL PROCEEDING ANY “SPECIAL DAMAGES,” AS DEFINED BELOW. EACH PARTY HERETO (X) 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 AND (Y) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY AND THE OTHER OBLIGATION DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. AS USED IN THIS SECTION, “SPECIAL DAMAGES” INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.

 

Section 21.                                   Payments Free of Taxes. Any and all payments by or on account of any obligation of Guarantor under this Guaranty shall be made free and clear of and without reduction or withholding for any taxes or other charges, provided that if Guarantor shall be required by applicable law to deduct any such taxes or other charges from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the applicable Guaranteed Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) Guarantor shall make such deductions; and (iii) Guarantor shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

Section 22.                                   Currency Equivalents Generally. Any amount specified in this Guaranty to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this Section 21, the “Spot Rate” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of 

 

13

 

determination a spot buying rate for any such currency.

 

14

 

Section 23.                                  Amendments and Waivers.   No amendment of this Guaranty shall be effective unless it is in writing and signed by Guarantor and the Administrative Agent, and no waiver of this Guaranty or consent to any departure by Guarantor herefrom shall be effective unless it is in writing and signed by the Administrative Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for that given and to the extent specified in such writing. In addition, all such amendments and waivers shall be effective only if given with the necessary approvals required in the Credit Agreement. No such amendment shall bind any Guarantor not a party thereto, but no such amendment with respect to any Guarantor shall require the consent of any other Guarantor.

 

Section 24.                                  Acceptance by the Guaranteed Parties. By their acceptance of the benefits hereof, the Guaranteed Parties shall be deemed to have agreed to be bound hereby and to perform any obligation on their part set forth herein.

 

Section 25.                                   Survival of Agreements.   All representations, warranties, covenants and agreements of Guarantor herein and in each other Guaranteed Document to which Guarantor is a party shall survive the execution and delivery of this Guaranty, the execution and delivery of any other Guaranteed Document and the creation of the Obligations.

 

Section 26. FINAL AGREEMENT.  THIS WRITTEN AGREEMENT AND THE OTHER OBLIGATION DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

 

Section 27.                                  Restatement.   This Guaranty amends and restates in its entirety the Original Guaranty, and from and after the date hereof, the terms and provisions of the Original Guaranty shall be superseded by the terms and provisions of this Guaranty.

 

[The remainder of this page is intentionally left blank.]

 

15

 

IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the date first written above.

 

	
 
    	
Executed by SUNDANCE ENERGY AUSTRALIA LIMITED   ACN 112 202 883 in accordance with Section 127 of the Corporations Act   2001(Australia) by:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name (please print)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name   
    
	
 
    	
 
    
	
 
    	
.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

	
ACCEPTED AS OF THE DATE FIRST
    	
 
    
	
WRITTEN ABOVE BY:
    	
 
    
	
 
    	
 
    
	
WELLS   FARGO BANK, N.A.
    	
 
    
	
as Administrative Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the date first written above.

 

 

	
 
    	
Executed   by SUNDANCE ENERGY AUSTRALIA LIMITED ACN 112 202 883 in accordance with Section 127 of the Corporations Act 2001   (Australia) by:

 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Secretary/Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (please print)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Secretary/Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name (please print)
    

 

 

	
ACCEPTED AS OF THE   DATE FIRST
    	
 
    
	
WRITTEN ABOVE BY:
    	
 
    
	
 
    	
 
    
	
WELLS FARGO BANK, N.A.,
    	
 
    
	
as Administrative 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:   Suzanne Ridenhour
    	
 
    
	
Title:   DirectorExhibit 10.3

 

STOCK PLEDGE AGREEMENT

 

dated as of December 28, 2012

 

of

 

SUNDANCE ENERGY AUSTRALIA LIMITED (ACN 112 202 883)

 

in favor of

 

WELLS FARGO BANK, N.A., as Administrative Agent

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I Definitions   and References
    	
1
    
	
 
    	
 
    
	
Section 1.1.
    	
Definitions in Credit Agreement
    	
1
    
	
Section 1.2.
    	
Definitions in the UCC, etc.
    	
1
    
	
Section 1.3.
    	
Definitions in this Agreement
    	
2
    
	
Section 1.4.
    	
Rules of Construction; References and Titles
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE II Security   Interest
    	
4
    
	
 
    	
 
    
	
Section 2.1.
    	
Grant of Security Interest
    	
4
    
	
Section 2.2.
    	
Secured Obligations Secured
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE III   Representations and Warranties
    	
4
    
	
 
    	
 
    
	
Section 3.1.
    	
Representations and Warranties
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE IV Covenants
    	
7
    
	
 
    	
 
    
	
Section 4.1.
    	
General Covenants
    	
7
    
	
Section 4.2.
    	
Covenants Relating Specifically to the Nature of the Collateral
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE V Voting and   Distribution Rights in Respect Of Pledged Equity
    	
10
    
	
 
    	
 
    
	
Section 5.1.
    	
Voting Rights
    	
10
    
	
Section 5.2.
    	
Dividend Rights While No Event of Default Exists
    	
10
    
	
Section 5.3.
    	
Actions by Secured Party
    	
10
    
	
Section 5.4.
    	
Rights While an Event of Default Exists
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VI Remedies,   Powers and Authorizations
    	
11
    
	
 
    	
 
    
	
Section 6.1.
    	
Normal Provisions Concerning the Collateral
    	
11
    
	
Section 6.2.
    	
Event of Default Remedies
    	
12
    
	
Section 6.3.
    	
Application of Proceeds
    	
14
    
	
Section 6.4.
    	
Deficiency
    	
14
    
	
Section 6.5.
    	
Private Sales of Pledged Equity
    	
14
    
	
Section 6.6.
    	
Indemnity and Expenses
    	
15
    
	
Section 6.7.
    	
Non-Judicial Remedies
    	
16
    
	
Section 6.8.
    	
Limitation on Duty of the Secured Party in Respect of Collateral
    	
16
    
	
Section 6.9.
    	
Appointment of Other Agents
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   Miscellaneous
    	
16
    
	
 
    	
 
    
	
Section 7.1.
    	
Notices
    	
16
    

 

 

	
Section 7.2.
    	
Amendments and Waivers
    	
17
    
	
Section 7.3.
    	
Preservation of Rights
    	
17
    
	
Section 7.4.
    	
Severability
    	
17
    
	
Section 7.5.
    	
Survival
    	
17
    
	
Section 7.6.
    	
Binding Effect and Assignment
    	
17
    
	
Section 7.7.
    	
Release of Collateral; Termination
    	
17
    
	
Section 7.8.
    	
Governing Law
    	
18
    
	
Section 7.9.
    	
Final Agreement
    	
18
    
	
Section 7.10.
    	
Facsimile
    	
19
    
	
Section 7.11.
    	
Acceptance by the Secured Party
    	
19
    

 

	
Schedule
    	
 
    	
 
    
	
Schedule   1
    	
Schedule   of Pledged Equity
    	
 
    

 

 

THIS STOCK PLEDGE AGREEMENT (this “Agreement”) is made as of December 28, 2012, by SUNDANCE ENERGY AUSTRALIA LIMITED (ACN 112 202 883), a company organized under the laws of South Australia (“Grantor”), in favor of WELLS FARGO BANK, N.A., individually and as administrative agent under the Credit Agreement, as defined below (the “Secured Party”) for the benefit of the Beneficiaries.

 

RECITALS

 

A.                                     Sundance Energy, Inc., a Colorado corporation (“Borrower”), is executing in favor of Lenders those certain promissory notes of even date herewith, payable to the order of Lenders in the aggregate principal amount of up to $300,000,000 (such promissory notes, as from time to time amended, and all promissory notes given in substitution, renewal or extension therefor or thereof, in whole or in part, being herein collectively called the “Note”).

 

B.                                     The Note is being executed pursuant to a Credit Agreement of even date herewith, (herein, as from time to time amended, supplemented or restated, called the “Credit Agreement”), by and among Borrower, Administrative Agent and Lenders, pursuant to which Lenders have agreed to advance funds to Borrower under the Note.

 

C.                                    It is a condition precedent to Lenders’ obligations to advance funds and issue letters of credit pursuant to the Credit Agreement and to enter into transactions under Hedging Contracts that Grantor shall execute and deliver to Administrative Agent a satisfactory pledge to secure Borrower’s obligations under the Note, the Credit Agreement and the Hedging Contracts.

 

D.                                    In order to induce the Beneficiaries to extend such credit, to issue letters of credit, provide Cash Management Services, and to enter into the Hedging Contracts, Grantor has agreed to grant to the Secured Party, for the benefit of the Beneficiaries, a security interest in the Collateral.

 

NOW, THEREFORE, in consideration of the premises and for other valuable consideration, the receipt and sufficiency of which the parties acknowledge, Grantor agrees as follows:

 

ARTICLE I

 

Definitions and References

 

Section 1.1.                                Definitions in Credit Agreement. Capitalized terms used herein and not otherwise defined have the respective meanings specified in the Credit Agreement.

 

Section 1.2.                                Definitions in the UCC, etc. The following terms have the meanings specified in the UCC:

 

(a)                                 Investment Property.

 

(b)                                Proceeds.

 

(c)                                  Securities Account.

 

 

(d)                                  Security.

 

(e)                                 Uncertificated Security.

 

Other terms used in this Agreement that are defined in the UCC and not otherwise defined herein or in the Credit Agreement have the meanings specified in the UCC, unless the context otherwise requires.

 

Section 1.3.                                 Definitions in this Agreement. The following terms have the following meamngs:

 

“Agreement” has the meaning specified in the preamble.

 

“Beneficiaries” means the Secured Party, LC Issuer, each Cash Management Lender, each Lender Counterparty, the Lenders, and any other Person to which any Secured Obligation is owed.

 

“Borrower” has the meaning specified in Recital A.

 

“Collateral” means all property described in Section 2.1 in which Grantor has any right, title or interest.

 

“Credit Agreement” has the meaning specified in Recital B. 

 

“Credit Parties” means Grantor and all Restricted Persons. 

 

“Grantor” has the meaning specified in the preamble. 

 

“Lenders” has the meaning specified in Recital A.

 

“Loan Documents” means each Loan Document (as defined in the Credit Agreement) and each Hedging Contract entered into from time to time between any Restricted Person and any Lender Counterparty.

 

“Pledged Equity” has the meaning specified in Section 2. l(a).

 

“Secured Obligations” means all Obligations of the Credit Parties now or hereafter arising under the Loan Documents, all Lender Hedging Obligations now or hereafter arising under any Hedging Contract and all Cash Management Obligations, including all amounts that constitute part of the Secured Obligations and would be owed by any Credit Party to any Beneficiary but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such Credit Party.

 

“Secured Party” has the meaning specified in the preamble. 

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“UCC” means the Uniform Commercial Code in effect in the State of Colorado from time to time; provided that, if perfection or the effect of perfection or non-perfection or the

 

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priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Colorado, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

Section 1.4.                               Rules of Construction; References and Titles. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise:

 

(a)                                Any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein).

 

(b)                                Unless otherwise specified, any reference herein to any Person shall be construed to include such Person’s successors and assigns.

 

(c)                                  The words “herein,” “hereof ‘ and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof.

 

(d)                                All references herein to Articles, Sections and Schedules shall be construed to refer to Articles and Sections of, and Schedules to, this Agreement.

 

(e)                                  Any reference to any Law herein shall, unless otherwise specified, refer to such law as amended, modified or supplemented from time to time.

 

(f)                                  The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

(g)                                 Except as specified otherwise, references to any document, instrument, or agreement shall include:

 

(i)                                    all exhibits, schedules, and other attachments thereto, and

 

(ii)                                 all documents, instruments, or agreements issued or executed in replacement thereof.

 

(h)                                 A title appearing at the beginning of any subdivision is for convenience only, does not constitute any part of such subdivision and shall be disregarded in construing the language contained in such subdivision.

 

(i)                                    The phrases “this Section” and “this subsection” and similar phrases refer only to the section or subsection hereof in which such phrases occur.

 

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G)                                  The word “or” is not exclusive, and the word “including” (in all of its grammatical variations) means “including without limitation”.

 

ARTICLE II

 

Security Interest

 

Section 2.1.                                Grant of Security Interest. As collateral security for the payment and performance of all Secured Obligations, Grantor pledges, collaterally assigns and grants to the Secured Party for the benefit of the Beneficiaries a continuing security interest in all right, title and interest of Grantor in and to all of the following property, whether now owned or existing or hereafter acquired or arising, regardless of where located and howsoever Grantor’s interests therein arise, whether by ownership, security interest, claim or otherwise:

 

(a)                                All Equity in Borrower including the Equity listed on Schedule 1 and all Equity in Borrower issued after the date hereof, all Equity that it may acquire in the future that is issued by any Person referred to in Schedule 1, all Equity that it may hold at any time in the future that is issued by any of its Domestic Subsidiaries and 65% of the issued and outstanding Equity that it may hold at any time in the future that is issued by any of its First-Tier Foreign Subsidiaries (the “Pledged Equity”).

 

(b)                                All rights and benefits, but no duty or obligation, of Grantor under all agreements, documents and instruments relating to the Pledged Equity.

 

(c)                                  Proceeds of the foregoing.

 

Section 2.2.                                Secured Obligations Secured.

 

(a)                                 The security interest created hereby in the Collateral secures the payment and performance of all Secured Obligations.

 

(b)                                Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts that constitute part of the Secured Obligations and would be owed by any Credit Party to any Beneficiary under the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving a Credit Party.

 

ARTICLE III

 

Representations and Warranties

 

Section 3.1.                               Representations and Warranties. Grantor represents and warrants to the Beneficiaries as follows:

 

(a)                                Each representation and warranty made by the Borrower with respect to Grantor in any other Loan Document is correct in all material respects (except that such materiality qualifier shall not be applicable to any representation or warranty that already is qualified or modified by materiality in the text thereof).

 

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(b)                                 Grantor has and will have at all times the right, power and authority to grant to the Secured Party as provided herein a security interest in the Collateral, free and clear of any Lien. This Agreement creates a valid and binding security interest in favor of the Secured Party in the Collateral, securing the Secured Obligations.

 

(c)                                 With respect to Pledged Equity:

 

(i)                                    All securities constituting Pledged Equity have been duly authorized and validly issued, are fully paid and non-assessable, and were not issued in violation of the preemptive rights of any Person or of any agreement by which Grantor or any issuer of Pledged Equity is bound.

 

(ii)                                 All documentary, stamp or other taxes or fees owing in connection with the issuance, transfer or pledge of any Pledged Equity (or rights in respect thereof) have been paid.

 

(iii)                             No restriction or condition exists with respect to the transfer, voting or capital of any Pledged Equity.

 

(iv)                             Except as disclosed on Schedule 1, neither Grantor nor any issuer of Pledged Equity has any outstanding subscription agreement, option, warrant or convertible security outstanding or any other right outstanding pursuant to which any Person would be entitled to have issued to it units of ownership interest in any issuer of Pledged Equity.

 

(v)                                Grantor has taken or concurrently herewith is taking all actions necessary to perfect the Secured Party’s security interest in Pledged Equity, including any registration, filing or notice that may be necessary or advisable under Article 8 or 9 of the UCC, and no other Person has any such registration, filing or notice in effect.

 

(vi)                             Schedule 1 correctly and completely reflects all Pledged Equity owned by Grantor as of the date hereof and Schedule 1 accurately sets forth the percentage of each class or series of Equity issued by the issuer of such Pledged Equity that is held by Grantor.

 

(vii)                           Schedule 1 sets forth all agreements, including all operating, management, voting and shareholder agreements to which Grantor is a party or by which it is bound and that relate to Pledged Equity and a correct and complete copy of each such agreement has been delivered to counsel for the Secured Party.

 

(viii)                       No issuer of Pledged Equity has made any call for capital that has not been fully paid by Grantor and each other holder of Equity of such issuer.

 

(ix)                            Neither Grantor nor any other holder of equity issued by any issuer of Pledged Equity is in default under any agreement relating to Pledged Equity.

 

(x)                               Neither the execution, delivery or performance of this Agreement nor the exercise of any right or remedy of the Secured Party hereunder will cause a default under

 

5

 

any agreement in respect of Pledged Equity or otherwise adversely affect or diminish any Pledged Equity.

 

(xi)                              Grantor’s rights under any agreement in respect of Pledged Equity are enforceable in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors’ rights.

 

(d)                                 The Pledged Equity listed on Schedule 1 constitutes all Equity owned by Granter in Borrower as of the date hereof. None of such Pledged Equity is certificated.

 

(e)                                  Granter is an entity of the type specified in the preamble and is organized under the laws of the jurisdiction specified in the preamble. Granter has not conducted business under any name except the name in which it has executed this Agreement, which is the exact name that appears in Grantor’s Organizational Documents.

 

(f)                                   Granter has good and marketable title to the Collateral, free and clear of all Liens, except for the security interest created by this Agreement. No effective financing statement or other registration or instrument similar in effect covering any Collateral is on file in any recording office except any that have been filed in favor of the Secured Party relating to this Agreement.

 

(g)                                 Neither the ownership or intended use of the Collateral by Granter, nor the grant of the security interest by Granter to the Secured Party hereunder:

 

(i)                                     conflicts with:

 

(A)                     any domestic or foreign Law,

 

(B)                     any Organizational Document of Granter or any issuer of Pledged Equity, or

 

(C)                      any agreement, judgment, license, order or permit applicable to or binding upon Granter or any issuer of Pledged Equity, or

 

(ii)                                 results in or requires the creation of any Lien, charge or encumbrance upon any asset of Granter (other than in favor of the Secured Party).

 

(h)                                 Except as expressly contemplated in the Loan Documents, no consent, approval, authorization or order of, and no notice to or filing with, any court, governmental authority or third party is required under the UCC in connection with the grant by Granter of the security interest hereunder.

 

(i)                                      This Agreement is the legal, valid and binding obligation of Granter, enforceable against Granter in accordance with its terms, except as limited by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors’ rights and general principles of equity.

 

6

 

G)                                  There is no action, suit or proceeding pending or, to the knowledge of Granter, threatened against or otherwise affecting Granter before any court, arbitrator or governmental department, commission, board, bureau, agency or instrumentality that could reasonably be expected materially and adversely to affect Granter’s financial condition or its ability to perform its obligations hereunder.

 

(k)                                 There is no condition precedent to the effectiveness of this Agreement that has not been satisfied or waived.

 

(1)                                 Granter has, independently and without reliance upon any Beneficiary and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and each other Loan Document to which it is or is to be a party, and Granter has established adequate means of obtaining from each other Credit Party on a continuing basis information pertaining to, and is now and on a continuing basis will be completely familiar with, the business, condition (financial or otherwise), operations, performance, properties and prospects of each other Credit Party.

 

(m)                             The direct or indirect value of the consideration received and to be received by Granter in connection herewith is reasonably worth at least as much as the liability of Granter hereunder and under each other Loan Document to which Grantor is a party, and the incurrence of such liability in return for such consideration may reasonably be expected to benefit Granter, directly or indirectly.

 

ARTICLE IV

 

Covenants

 

Section 4.1.                                 General Covenants. Granter will at all times perform and observe the covenants contained in the Loan Documents that are applicable to Granter for so long as any Secured Obligation is outstanding. In addition, Granter will, so long as this Agreement shall be in effect, perform and observe the following:

 

(a)                                  Without limitation of any other covenant herein, Granter shall not cause or permit any change in its name, identity or organizational structure, or any change to its jurisdiction of organization, unless Granter shall have first:

 

(i)                                    notified the Secured Party of such change at least 30 days prior to the effective date of such change (or such shorter notice as the Secured Party may approve),

 

(ii)                                taken all action reasonably requested by the Secured Party (under the following subsection (b) or otherwise) for the purpose of further confirming and protecting the Secured Party’s security interest and rights under this Agreement and the perfection and priority thereof, and

 

(iii)                              if requested by the Secured Party, provided to the Secured Party a legal opinion to the Secured Party’s satisfaction confirming that such change shall not adversely affect the Secured Party’s security interest and rights under this Agreement or the perfection or priority of such security interest.

 

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In any notice delivered pursuant to this subsection, Granter will expressly state that the notice is required by this Agreement and contains facts that may require additional filings of financing statements or other notices for the purposes of continuing perfection of the Secured Party’s security interest in the Collateral.

 

(b)                                Granter will, at its expense and as from time to time reasonably requested by the Secured Party, promptly execute and deliver all further instruments, agreements, filings and registrations, and take all further action, in order:

 

(i)                                     to confirm and validate this Agreement and the Secured Party’s rights and remedies hereunder;

 

(ii)                                 to correct any error or omission in the description herein of the Secured Obligations or the Collateral or in any other provision hereof;

 

(iii)                              to perfect, register and protect the security interest and rights created or purported to be created hereby or to maintain or upgrade in rank the priority of such security interests and rights;

 

(iv)                             to enable the Secured Party to exercise and enforce its rights and remedies hereunder; or

 

(v)                                 otherwise to give the Secured Party the full benefits of the rights and remedies described in or granted under this Agreement.

 

As part of the foregoing, Granter will, whenever reasonably requested by the Secured Party:

 

(A)                               execute and file any financing statement, continuation statement or other filing or registration relating to the Secured Party’s security interest and rights hereunder, and any amendment thereto, and

 

(B)                               mark its books and records relating to any Collateral to reflect that such Collateral is subject to this Agreement and the security interests hereunder.

 

(c)                                  Granter will:

 

(i)                                    Maintain good and marketable title to all Collateral, free and clear of all Liens except for the security interest created by this Agreement, and not grant or allow any such Lien to exist.

 

(ii)                                Not allow to remain in effect, and cause to be terminated, any financing statement or other registration or instrument similar in effect covering any Collateral, except any that has been filed in favor of the Secured Party relating to this Agreement.

 

(iii)                              Defend the Secured Party’s right, title and special property and security interest in and to the Collateral against the claims of any Person.

 

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(d)                                 Grantor shall not take any action that would, or fail to take any action if such failure would, impair the enforceability, perfection or priority of the Secured Party’s security interest in any Collateral.

 

Section 4.2.                                Covenants Relating Specifically to the Nature of the Collateral. Grantor will, for so long as any Secured Obligation is outstanding, perform and observe the following:

 

(a)                                 (i)                                    If Grantor shall at any time hold or acquire any certificated Security evidencing Collateral, Grantor will forthwith endorse, assign, and deliver the same to the Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as the Secured Party may from time to time specify.

 

(ii)                                  If any Pledged Equity is an Uncertificated Security and is issued to Grantor or its nominee directly by the issuer thereof, Grantor will immediately notify the Secured Party of such issuance and, pursuant to an agreement in form and substance satisfactory to the Secured Party, cause the issuer thereof to agree to comply with instructions from the Secured Party as to such Security, without further consent of Grantor or such nominee, or take such other action as the Secured Party may approve in order to perfect the Secured Party’s security interest in such Security.

 

(iii)                               Grantor shall not permit any Pledged Equity to be held by a securities intermediary or held in a Securities Account.

 

(iv)                              Grantor shall not permit any Pledged Equity that is an equity interest in a limited liability company or a limited partnership and that is a General Intangible to become Investment Property unless the Secured Party shall have control of such Investment Property within the meaning of Section 8-106 of the UCC.

 

(v)                                 Grantor shall not:

 

(A)                              adjust, settle, compromise, amend or modify any right in respect of any Pledged Equity or any agreement relating thereto;

 

(B)                              permit the creation of any additional equity interest in any issuer of Pledged Equity, unless immediately upon creation the same is pledged to the Secured Party pursuant hereto to the extent necessary to give the Secured Party a first-priority security interest in such Pledged Equity after such creation that is in the aggregate at least the same percentage of such Pledged Equity as was subject hereto before such issue, whether such additional interest is presently vested or will vest upon the payment of money or the occurrence or nonoccurrence of any other condition; or

 

(C)                               enter into any agreement, other than the Loan Documents, creating, or otherwise permit to exist, any restriction or condition upon the transfer or exercise of any rights in respect of any Pledged Equity, including any restriction or condition upon the transfer, voting or control of any Pledged Equity.

 

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(b)                                  If Granter shall acquire at any time any additional Equity constituting Collateral, Granter shall promptly notify the Secured Party in writing of the details thereof and execute and deliver to the Secured Party a supplement to Schedule 1 listing such Equity, which supplement shall take effect without further action on the part of any party hereto or beneficiary hereof.

 

ARTICLE V

 

Voting and Distribution Rights in Respect Of Pledged Equity

 

Section 5.1.                                Voting Rights. Granter shall be entitled to exercise all voting and other consensual rights pertaining to the Pledged Equity or any part thereof for any purpose; provided that Granter shall not exercise or refrain from exercising any such right if such action would have a material adverse effect on the value of any Pledged Equity or on the Secured Party’s security interest or the value thereof.

 

Section 5.2.                                 Dividend Rights While No Event of Default Exists. Granter shall be entitled to receive and retain all dividends and other distributions paid in respect of the Pledged Equity if and to the extent that the payment thereof is not otherwise prohibited by the Loan Documents; provided that:

 

(a)                                 all dividends, interest and other distributions paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Equity;

 

(b)                                 all dividends and other distributions paid or payable in cash in respect of any Pledged Equity in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in surplus; and

 

(c)                                   all cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Pledged Equity, shall be, and shall be forthwith delivered to the Secured Party to hold as Collateral and shall, if received by Granter, be received in trust for the benefit of the Secured Party, be segregated from the other property or funds of Granter and be forthwith delivered by Granter to the Secured Party as Pledged Equity in the same form as so received (with any necessary indorsement).

 

Section 5.3.                                Actions by Secured Party. The Secured Party will promptly execute and deliver (or promptly cause to be executed and delivered) to Granter all such proxies and other instruments as Granter may reasonably request for the purpose of enabling Granter to exercise the voting and other rights that it is entitled to exercise pursuant to Section 5.1 above and to receive the dividends or interest payments that it is authorized to receive and retain pursuant to Section 5.2 above.

 

Section 5.4.                                Rights While an Event of Default Exists. Upon the occurrence and during the continuance of an Event of Default:

 

(a)                                 All rights of Granter to receive the dividends and other distributions that it would otherwise be authorized to receive and retain pursuant to Section 5.2 shall automatically cease,

 

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and all such rights shall thereupon become vested in the Secured Party, which shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights and to receive and hold as Pledged Equity such dividends and other distributions.

 

(b)                                 All dividends and other distributions that are received by Grantor contrary to subsection (a) above shall be received in trust for the benefit of the Secured Party, shall be segregated from other funds of Grantor and shall be forthwith paid over to the Secured Party as Pledged Equity in the same form as so received (with any necessary indorsement).

 

ARTICLE VI

 

Remedies, Powers and Authorizations 

 

Section 6.1.                               Normal Provisions Concerning the Collateral.

 

(a)                                 Grantor irrevocably authorizes the Secured Party at any time and from time to time to file, without the signature of Grantor, in any jurisdiction any amendments to existing financing statements and any initial financing statements and amendments thereto that:

 

(i)                                    indicate the nature of the Collateral;

 

(ii)                                 contain any other information required for the sufficiency or filing office acceptance of any financing statement or amendment, including whether Grantor is an organization, the type of organization and any organization identification number issued to Grantor; and

 

(iii)                              properly effectuate the transactions described in the Loan Documents, as determined by the Secured Party in its discretion. 

 

Grantor will furnish any such information to the Secured Party promptly upon request. A carbon, photographic or other reproduction of this Agreement or any financing statement describing any Collateral is sufficient as a financing statement and may be filed in any jurisdiction by the Secured Party. Grantor ratifies and approves all financing statements heretofore filed by or on behalf of the Secured Party in any jurisdiction in connection with the transactions contemplated hereby.

 

(b)                                 Grantor appoints the Secured Party as Grantor’s attorney in fact and proxy, with full authority in the place and stead of Grantor and in the name of Grantor or otherwise, from time to time after the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument that the Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement including any action or instrument:

 

(i)                                    to ask for, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any Collateral;

 

(ii)                                 to receive, indorse and collect any drafts or other Instruments or Documents;

 

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(iii)                              to enforce any obligations included in the Collateral; and

 

(iv)                             to file any claims or take any action or institute any proceedings that the Secured Party may deem necessary or desirable for the collection of any Collateral or otherwise to enforce the rights of Granter or the Secured Party with respect to any Collateral.

 

Such power of attorney and proxy are coupled with an interest, are irrevocable, and are to be used by the Secured Party for the sole benefit of the Beneficiaries.

 

(c)                                 If Granter fails to perform any agreement or obligation contained herein, the Secured Party may, but shall have no obligation to, itself perform, or cause performance of, such agreement or obligation, and the expenses of the Secured Party incurred in connection therewith shall be payable by Granter under Section 6.6.

 

(d)                                The Secured Party shall have the right, at any time upon the occurrence and during the continuance of an Event of Default and without notice to Granter, to transfer to or to register in the name of the Secured Party or any of its nominees any Pledged Equity, subject only to the revocable rights specified in Section 5.1.

 

(e)                                  Anything herein to the contrary notwithstanding:

 

(i)                                    Granter shall remain liable to perform all duties and obligations under the agreements included in the Collateral to the same extent as if this Agreement had not been executed.

 

(ii)                                 The exercise by the Secured Party of any right hereunder shall not release Granter from any duty or obligation under any agreement included in the Collateral.

 

(iii)                              No Beneficiary shall have any obligation or liability under the agreements in respect of the Collateral by reason of this Agreement or any other Loan Document, nor shall any Beneficiary be obligated to perform any duty or obligation of Granter thereunder or take any action to collect or enforce any claim for payment assigned hereunder.

 

Section 6.2.                                Event of Default Remedies. If an Event of Default shall have occurred and be continuing, the Secured Party may from time to time in its discretion, without limitation and without notice except as expressly provided below:

 

(a)                                 Exercise in respect of the Collateral, in addition to any other right and remedy provided for herein, under the other Loan Documents, or otherwise available to it, all the rights and remedies of a secured party on default under the UCC (whether or not the UCC applies to the affected Collateral) and any other applicable law.

 

(b)                                 Require Granter to, and Granter will at its expense and upon request of the Secured Party forthwith, assemble all or part of the Collateral as directed by the Secured Party and make it (together with all books, records and information of Granter relating thereto)

 

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available to the Secured Party at a place to be designated by the Secured Party that is reasonably convenient to both parties.

 

(c)                                Prior to the disposition of any Collateral:

 

(i)                                    to the extent permitted by applicable Law, enter, with or without process of law and without breach of the peace, any premises where any Collateral is or may be located, and without charge or liability to the Secured Party seize and remove such Collateral from such premises;

 

(ii)                                  have access to and use the Company’s books, records, and information relating to the Collateral; and

 

(iii)                               store or transfer any Collateral without charge in or by means of any storage or transportation facility owned or leased by Grantor, process, repair or recondition any Collateral or otherwise prepare it for disposition in any manner and to the extent the Secured Party deems appropriate and, in connection with such preparation and disposition, use without charge any copyright, trademark, trade name, patent or technical process used by Grantor.

 

(d)                                 Reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part, the security interest created hereby by any available judicial procedure.

 

(e)                                 Dispose of, at its office, on the premises of Grantor or elsewhere, any Collateral, as a unit or in parcels, by public or private proceedings, and by way of one or more contracts (but that the sale of any Collateral shall not exhaust the Secured Party’s power of sale, and sales may be made from time to time, and at any time, until all of the Collateral has been sold or until the Secured Obligations have been paid and performed in full), and at any such sale it shall not be necessary to exhibit any Collateral.

 

(f)                                  Buy (or allow any Beneficiary to buy) Collateral, or any part thereof, at any public sale.

 

(g)                                 Buy (or allow any Beneficiary to buy) Collateral, or any part thereof, at any private sale if any Collateral is of a type customarily sold in a recognized market or is of a type that is the subject of widely distributed standard price quotations.

 

(h)                                Apply by appropriate judicial proceedings for appointment of a receiver for the Collateral, or any part thereof, and Grantor consents to any such appointment.

 

(i)                                    Comply with any applicable state or federal Law requirement in connection with a disposition of Collateral and such compliance shall not be considered to affect adversely the commercial reasonableness of any sale of Collateral.

 

(j)                                    Sell Collateral without giving any warranty with respect to title or any other matter and for cash, on credit or for non-cash consideration as the Secured Party determines is appropriate.

 

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(k)                                 To the extent notice of sale shall be required by law with respect to Collateral, at least 10-days’ notice to Granter of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification; provided that, if the Secured Party fails in any respect to give such notice, its liability for such failure shall be limited to the liability (if any) imposed on it by law under the UCC. The Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

 

Section 6.3.                                Application of Proceeds. If an Event of Default shall have occurred and be continuing, any cash held by or on behalf of the Secured Party and all cash proceeds received by or on behalf of the Secured Party in respect of any sale of, collection from, or other realization upon any Collateral may, in the discretion of the Secured Party, be held by the Secured Party as collateral for, and/or then or at any time thereafter applied in whole or in part by the Secured Party for the benefit of the Beneficiaries against, any Secured Obligation, in the following manner:

 

(a)                                 First, paid to the Secured Party for any amounts then owing to the Secured Party pursuant to the Credit Agreement or otherwise under the Loan Documents or that has otherwise been incurred by the Secured Party in connection with the payment or other satisfaction of any Lien, encumbrance or adverse claim upon or against any Collateral or any other action that the Secured Party determines is reasonably appropriate in connection with the preservation or maintenance of the Collateral.

 

(b)                                 Second, paid to the Beneficiaries in payment of the Secured Obligations, ratably in accordance with the respective amounts thereof then owing to the Beneficiaries or as otherwise provided in the Credit Agreement.

 

(c)                                  Third, any surplus of such cash or cash proceeds held by or on the behalf of the Secured Party and remaining after payment in full of all the Secured Obligations shall be paid over to Granter or to whatever Person may be lawfully entitled to receive such surplus.

 

Section 6.4.                                Deficiency. If the proceeds of any sale, collection or realization of or upon the Collateral of Granter by the Secured Party are insufficient to pay all Secured Obligations and all other amounts to which the Secured Party is entitled, Granter shall be liable for the deficiency, together with interest thereon as provided in the Loan Documents or (if no interest is so provided) at such other rate as shall be fixed by applicable law, together with the costs of collection and the reasonable fees of any attorneys employed by the Secured Party (that are not employees of the Secured Party or any Affiliate of the Secured Party) and/or the other Beneficiaries to collect such deficiency. Collateral may be sold at a loss to Granter, and the Secured Party shall have no liability or responsibility to Granter for such loss. Granter acknowledges that a private sale may result in less proceeds than a public sale.

 

Section 6.5.                               Private Sales of Pledged Equity. The Beneficiaries may deem it impracticable to effect a public sale of any Pledged Equity and may determine to make one or more private sales of such Pledged Equity to a restricted group of purchasers that will be

 

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obligated to agree, among other things, to acquire the same for their own account, for investment and not with a view to the distribution or resale thereof. Any such private sale may be at a price and on other terms less favorable to the seller than the price and other terms that might have been obtained at a public sale. Any such private sale nevertheless shall be deemed to have been made in a commercially reasonable manner, and neither the Secured Party nor any other Beneficiary shall have any obligation to delay sale of any such Pledged Equity for the period of time necessary to permit their registration for public sale under the Securities Act. Any offer to sell any such Collateral that has been:

 

(i)                                    publicly advertised on a bona-fide basis in a newspaper or other publication of general circulation in the financial community of Denver, Colorado (to the extent that such an offer may be so advertised without prior registration under the Securities Act), or

 

(ii)                                 made privately in the manner described above to not less than 15 bona-fide offerees, 

 

shall be deemed to involve a “public disposition” under Section 9-610(c) of the UCC, notwithstanding that such sale may not constitute a “public offering” under the Securities Act, and any Beneficiary may bid for such Collateral.

 

Section 6.6.                                Indemnity and Expenses. In addition to, but not in qualification or limitation of, any similar obligations under other Loan Documents:

 

(a)                                 Grantor will indemnify the Secured Party, each other Beneficiary and any agent appointed pursuant to Section 6.9 from and against all claims, losses and liabilities growing out of or resulting from this Agreement (including enforcement of this Agreement), WHETHER OR NOT SUCH CLAIMS, LOSSES AND LIABILITIES ARE IN ANY WAY OR TO ANY EXTENT CAUSED BY OR ARISING OUT OF SUCH INDEMNIFIED PARTY’S OWN NEGLIGENCE OR STRICT LIABILITY, except to the extent such claims, losses or liabilities are proximately caused by such indemnified party’s individual gross negligence or willful misconduct.

 

(b)                                 Grantor will upon demand pay to the Secured Party the amount of all costs and expenses, including the reasonable fees and disbursements of the Secured Party’s counsel (that are not employees of the Secured Party or any of its Affiliates) and of any experts and agents, that the Secured Party may incur in connection with:

 

(i)                                    the transactions that give rise to this Agreement;

 

(ii)                                the preparation of this Agreement and the perfection and preservation of this security interest created under this Agreement; or

 

(iii)                              the administration of this Agreement.

 

(c)                                  Grantor will upon demand pay to the Secured Party the amount of all costs and expenses, including the fees and disbursements of the Secured Party’s counsel (that are not

 

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employees of the Secured Party or any of its Affiliates) and of any experts and agents, that the Secured Party may incur in connection with:

 

(i)                                     the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral;

 

(ii)                                 the exercise or enforcement of any right of the Secured Party hereunder; or

 

(iii)                              the failure by Grantor to perform or observe any of the provisions hereof.

 

Section 6.7.                               Non-Judicial Remedies. In granting to the Secured Party the power to enforce its rights hereunder without prior judicial process or judicial hearing, to the extent permitted by applicable Law, Grantor waives, renounces and knowingly relinquishes any legal right that might otherwise require the Secured Party to enforce its rights by judicial process and confirms that such remedies are consistent with the usage of trade, are responsive to commercial necessity and are the result of a bargain at arm’s length. The Secured Party may, however, in its discretion, resort to judicial process.

 

Section 6.8.                                Limitation on Duty of the Secured Party in Respect of Collateral. Beyond the exercise of reasonable care in the custody thereof, the Secured Party shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Secured Party shall be deemed to have exercised reasonable care in the custody of Collateral in its possession if such Collateral is accorded treatment substantially equal to which that it accords its own property, and the Secured Party shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Secured Party in good faith.

 

Section 6.9.                                Appointment of Other Agents. At any time, in order to comply with any legal requirement in any jurisdiction, the Secured Party may appoint any bank or trust company or one or more other Persons, either to act as co-agent or co-agents, jointly with the Secured Party, or to act as separate agent or agents on behalf of the Secured Party, with such power and authority as may be necessary for the effective operation of the provisions hereof and may be specified in the instrument of appointment.

 

ARTICLE VII

 

Miscellaneous

 

Section 7.1.                                Notices. Any notice or communication required or permitted hereunder shall be given in writing, sent in the manner provided in the Amended and Restated Guaranty of even date herewith by Grantor in favor of Secured Party (“Guaranty”), or to such other address or to the attention of such other individual as hereafter shall be designated in writing by the applicable party sent in accordance herewith. Any such notice or communication shall be deemed to have been given as provided in the Guaranty for notices given thereunder.

 

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Section 7.2.                                Amendments and Waivers. Except as provided in Section 4.2(b) or 7.3, no amendment of this Agreement shall be effective unless it is in writing and signed by Grantor and the Secured Party, and no waiver of this Agreement or consent to any departure by Grantor herefrom shall be effective unless it is in writing and signed by the Secured Party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for that given and to the extent specified in such writing. In addition, all such amendments and waivers shall be effective only if given with the necessary approvals required in the Credit Agreement.

 

Section 7.3.                                Preservation of Rights. No failure on the part of the Secured Party or any other Beneficiary to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Secured Party provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law or otherwise.

 

Section 7.4.                                 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or invalidity without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

Section 7.5.                                 Survival. Each representation and warranty, covenant and other obligation of Grantor herein shall survive the execution and delivery of this Agreement, the execution and delivery of any other Loan Document and the creation of the Secured Obligations.

 

Section 7.6.                                Binding Effect and Assignment. This Agreement shall:

 

(a)                                be binding on Grantor and its successors and permitted assigns, and

 

(b)                                 inure, together with all rights and remedies of the Secured Party hereunder, to the benefit of the Secured Party and the other Beneficiaries and their respective successors, transferees and assigns who acquire their interests in accordance with the assignment provisions of the Credit Agreement.

 

Without limiting the generality of the foregoing, the Secured Party and any other Beneficiary may (in accordance with the provisions of the Loan Documents) pledge, assign or otherwise transfer any right under any Loan Document to any other Person, and such other Person shall thereupon become vested with all benefits in respect thereof granted herein or otherwise. No right or duty of Grantor hereunder may be assigned or otherwise transferred without the prior written consent of the Secured Party.

 

Section 7.7.                                Release of Collateral; Termination.

 

(a)                                 Upon any sale, lease, transfer or other disposition of any Collateral of Grantor in accordance with the Loan Documents, the Secured Party will, at Grantor’s expense, execute and deliver to Grantor such documents as Grantor shall reasonably request to evidence the release of such Collateral from the assignment and security interest granted hereby; provided that:

 

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(i)                                     at the time of such request and such release no Default shall have occurred and be continuing,

 

(ii)                                  Grantor shall have delivered to the Secured Party, at least 10 Business Days prior to the date of the proposed release (or by such lesser notice as the Secured Party may approve), a written request for release describing the item of Collateral and the terms of the sale, lease, transfer or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a form of release for execution by the Secured Party and a certificate of Grantor to the effect that the transaction is in compliance with the Loan Documents and such other matters as the Secured Party may request, and

 

(iii)                              if any Loan Document provides for any application of the proceeds of any such sale, lease, transfer or other disposition, or any payment to be made, in connection therewith, such proceeds shall have been applied or payment made as provided therein, or arrangements satisfactory to the Administrative Agent for such application or payment have been made.

 

(b)                               Upon, and only upon the payment and satisfaction in full in cash of the Secured Obligations (other than (i) contingent indemnification obligations, (ii) Lender Hedging Obligations as to which arrangements satisfactory to the Administrative Agent and Lender Counterparty have been made, and (iii) Letters of Credit as to which arrangements satisfactory to the Administrative Agent and LC Issuer have been made) and the termination or expiration of all Commitments of the Lenders under the Credit Agreement, this Agreement and the security interest created hereby shall terminate, all rights in the Collateral shall revert to Grantors and the Secured Party, ata Grantor’s request and at its expense, will:

 

(i)                                     return to Grantor such of Grantor’s Collateral in the Secured Party’s possession as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof, and

 

(ii)                                 execute and deliver to Grantor such documents as Grantor shall reasonably request to evidence such termination.

 

Notwithstanding the foregoing, Section 6.6 shall suI”Vive the termination of this Agreement.

 

(c)                                No Grantor is authorized to file any financing statement or amendment or termination statement with respect to any financing statement originally filed in connection with this Agreement without the prior written consent of the Secured Party, subject to Grantors’ rights under Sections 9-509(d)(2) and 9-518 of the UCC.

 

Section 7.8.                                Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.

 

Section 7.9.                               Final Agreement. This Agreement and the other Loan Documents represent the final agreement between the parties hereto and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties hereto. There are no unwritten oral agreements between the parties hereto.

 

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Section 7.10.  Facsimile. This Agreement may be validly delivered by facsimile or other electronic transmission of an executed counterpart of the signature page hereof.

 

Section 7.11.  Acceptance by the Secured Party. By their acceptance of the benefits hereof, the Secured Party and the Beneficiaries shall be deemed to have agreed to be bound hereby and to perform any obligation on their part set forth herein.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, Grantor has executed and delivered this Agreement as of the date first-above written.

 

 

	
 
    	
Executed by SUNDANCE ENERGY AUSTRALIA   LIMITED ACN 112 202 883 in accordance with Section 127 of the   Corporations Act 2001 (Australia) by:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
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Name   (please print)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
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