Document:

Exhibit 10.4

 

 

 

BORROWER:

Sundance Energy, LP.

 

GUARANTOR:

David S. McKenney

 

CONTINUING AND UNCONDITIONAL GUARANTY

 

IMPORTANT NOTICE

 

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

 

1.  The Guaranty. For valuable consideration, the undersigned, (whether one or more than one “Guarantor”) hereby unconditionally guarantees and promises to pay promptly to Bank of America, N.A., its subsidiaries and affiliates (collectively, “Bank”), or order!, in lawful money of the United States, any and all Indebtedness of Sundance Energy, LP. (“Borrower”) to Bank when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter. The liability of Guarantor under this Guaranty is not limited as to the principal amount of the Indebtedness guaranteed and includes, without limitation, liability for all interest, fees, indemnities, and other costs and expenses relating to or arising out of the Indebtedness and for all swap, derivative, foreign exchange or hedge or other similar transaction or arrangement (“Swap Obligations”) now or hereafter owing from Borrower to Bank. No Guarantor will be deemed to be a guarantor of any Swap Obligation to the extent that such Guarantor is not an Eligible Contract Participant at the time such guaranty becomes effective with respect to such Swap Obligations as set forth in the Commodities Exchange Act (7 U.S.C., Sec. 1, et. seq.). The liability of Guarantor is continuing and relates to any Indebtedness, including that arising under successive transactions which shall either continue the Indebtedness or from time to time renew it after it has been satisfied. This Guaranty is cumulative and does not supersede any other outstanding guaranties, and the liability of Guarantor under this Guaranty is exclusive of Guarantors liability under any other guaranties signed by Guarantor. If multiple individuals or entities sign this Guaranty, their obligations under this Guaranty shall be joint and several. “Indebtedness” shall mean and includes any and all advances, debts, obligations and liabilities of Borrower, or any of them, previously, now or later made, incurred or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, including Swap Obligations and obligations under any deposit, treasury management or other similar transaction or arrangement, and whether any of the Borrowers may be liable individually or jointly with others, or whether recovery upon such Indebtedness may be or later becomes unenforceable.

 

2.  Obligations Independent. The obligations under this Guaranty are independent of the obligations of Borrower or any other guarantor, and a separate action or actions may be brought and prosecuted against Guarantor whether action is brought against Borrower or any other guarantor or whether Borrower or any other guarantor be joined in any such action or actions.

 

3.  Rights of Bank. Guarantor authorizes Bank, without notice or demand and without affecting its liability hereunder, from time to time to:

 

(a) renew, compromise, extend, accelerate, or otherwise change the time for payment, or otherwise change the terms, of the Indebtedness or any part thereof, including increase or decrease of 

 

 

Ref #: 1002474989: - Sundance Energy, LP.

Continuing and Unconditional Guaranty

 

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the rate of interest, or otherwise change the terms of any Bank Agreements;

 

(b)  receive and hold security for the payment of this Guaranty or any indebtedness and exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any such security;

 

(c)  apply such security and direct the order or manner of sale thereof as Bank in its discretion may determine;

 

(d)  release or substitute any Guarantor or any one or more of any endorsers or other guarantors of any of the Indebtedness; and

 

(e)  permit the Indebtedness to exceed Guarantor’s liability under this Guaranty, and Guarantor agrees that any amounts received by Bank from any source other than Guarantor shall be deemed to be applied first to any portion of the Indebtedness not guaranteed by Guarantor.

 

4.  Guaranty to be Absolute. Guarantor agrees that until the Indebtedness has been paid in full in immediately available funds and any commitments of Bank or facilities provided by Bank with respect to the Indebtedness have been terminated, Guarantor shall not be released by or because of the taking, or failure to take, any action that might in any manner vary, discharge or otherwise reduce, limit, or modify Guarantor’s obligations under this Guaranty. Guarantor waives and surrenders any defense to any liability under this Guaranty based upon any such action, including but not. limited to any action of Bank described in the immediately preceding paragraph of this Guaranty. It is the express intent of Guarantor that Guarantor’s obligations under this Guaranty are and shall be absolute and unconditional. This is a guaranty of payment and not merely a guaranty of collection. If this Guaranty is revoked, returned, or canceled, and subsequently any payment or transfer of any interest in property by Borrower to Bank is rescinded or must be returned by Bank to Borrower, this Guaranty shall be reinstated with respect to any such payment or transfer, regardless of any such prior revocation, return, or cancellation; and any guaranty of any indemnities, shall survive any termination of this Guaranty. In the event of the death of a Guarantor, the liability of the estate of the deceased Guarantor shall continue in full force and effect as to (i) the Indebtedness existing at the date of death, and any renewals or extensions, and (ii) loans or advances made to or for the account of Borrower after the date of the death of the deceased Guarantor pursuant to a commitment made by Bank to Borrower prior to the date of such death. As to all surviving Guarantors, this Guaranty shall continue in full force and effect after the death of a Guarantor, not only as to the Indebtedness existing at that time, but also as to the Indebtedness later incurred by Borrower to Bank. In the event that acceleration of the time for payment of any of the Indebtedness is stayed upon the insolvency, bankruptcy, or reorganization of Borrower or otherwise, all such Indebtedness guaranteed by Guarantor shall nonetheless be payable by Guarantor immediately if requested by Bank.

 

5.  Guarantor’s Waivers of Certain Rights and Certain Defenses. Guarantor waives:

 

(a) any right to require Bank to:

 

(i) proceed against Borrower or any other person;

 

(ii) marshal assets or proceed against or exhaust any security held from any of the Borrowers or any other person;

 

(iii) give notice of the terms, time and place of any public or private sale or other disposition of personal property security held from Borrower or any other person;

 

(iv) take any other action or pursue any other remedy in Bank’s power; or

 

(v) make any presentment or demand for performance, or give any notice of nonperformance, acceleration, protest, notice of protest or notice of dishonor hereunder or in connection with any obligations or evidences of indebtedness held by Bank as security for or which constitute in whole or in part the Indebtedness guaranteed hereunder, or in connection with 

 

Ref #: 1002474989 : - Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

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the creation of new or additional Indebtedness, or give any notice of acceptance of this Guaranty, or notices of any fact that might increase Guarantor’s risk.

 

(b) any defense to its obligations under this Guaranty based upon or arising by reason of:

 

(i) any disability or other defense of Borrower or any other person;

 

(ii) the cessation or limitation from any cause whatsoever, other than payment in full, of the Indebtedness of Borrower or’ any other person;

 

(iii) any lack of authority of any officer, director, partner, agent or any other person acting or purporting to act on behalf Borrower which is a corporation, partnership or other type of entity, or any defect in the formation of Borrower;

 

(iv) the application by Borrower of the proceeds of any Indebtedness for purposes other than the purposes represented by Borrower to, or intended or understood by, Bank or Guarantor;

 

(v) any act or omission by Bank which directly or indirectly results in or aids the discharge of Borrower or any portion of the Indebtedness by operation of law or otherwise, or which in any way impairs or suspends any rights or remedies of Bank against Borrower;

 

(vi) any impairment of the value of any interest in any security for the Indebtedness, including without limitation, the failure to obtain or maintain perfection or recordation of any interest in any such security, the release of any such security without substitution, and/or the failure to preserve the value of, or to comply with applicable law in disposing of, any such security;

 

(vii) any modification of the Indebtedness, in any form whatsoever, including any modification made after revocation hereof to any Indebtedness incurred prior to such revocation, and including without limitation the renewal, extension, acceleration or other change in time for payment of, or other change in the terms of, the Indebtedness, including increase or decrease of the rate of interest;

 

(viii) any requirement that Bank give any notice of acceptance of this Guaranty;

 

(ix) any defense based on any claim that Guarantor’s obligations exceed or are more burdensome than those of Borrower;

 

(x) the benefit of any statute of limitations affecting Guarantor’s liability under this Guaranty; or

 

(xi) any election of remedies by Bank, even though that election of remedies, such as a non-judicial foreclosure with respect to any security for any portion of the Indebtedness, destroys Guarantor’s rights of subrogation or Guarantor’s rights to proceed against Borrower for reimbursement.

 

(c)  until the Indebtedness has been paid in full and any commitments of Bank or facilities provided by Bank with respect to the Indebtedness have been terminated, even though the Indebtedness may be in excess of Guarantor’s liability hereunder, to the extent permitted by applicable law, any right of subrogation, reimbursement, indemnification, and contribution (contractual, statutory, or otherwise); and

 

(d)  the benefits of Virginia Code §49-25 and Virginia Code §49-26, as amended, or otherwise, or any similar statute.

 

Ref #: 1002474989 : - Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

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No provision or waiver in this Guaranty shall be construed as limiting the generality of any other waiver contained in this Guaranty.

 

6.   Lien and Setoff. Guarantor grants to Bank a continuing lien, security interest, and right of setoff as security for all of Guarantor’s liabilities and obligations to Bank, whether now existing or later arising, upon and against all the deposits, credits, collateral and property of Guarantor (other than clients’ trust and other fiduciary accounts or escrows) now or hereafter in the possession, custody, or control of Bank or any entity under the control of Bank of America Corporation and its successors and assigns or in transit to any of them. At any time, without further demand or notice (any such notice; being expressly waived by Guarantor), Bank may set off the same or any part thereof and apply the same to any liability or obligation of Guarantor even though unmatured and regardless of the adequacy of any other collateral securing this Guaranty. TO THE EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE {LIABILITIES PRIOR TO EXERCISING ITS RIGHT OF SET OFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF GUARANTOR, ARE VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVED.

 

7.   Subordination. Any obligations of Borrower to Guarantor, now or hereafter existing, including but not limited to any obligations to Guarantor as subrogee of Bank or resulting from Guarantor’s performance under this Guaranty, are hereby subordinated to the Indebtedness. Guarantor agrees that, if Bank so requests, Guarantor shall not demand, take, or receive from Borrower, by setoff or in any other manner, payment of any other obligations of Borrower to Guarantor until the Indebtedness has been paid in full and any commitments of Bank or facilities provided by Bank with respect to the Indebtedness have been terminated. If any payments are received by Guarantor in violation of such waiver or agreement, such payments shall be received by Guarantor as trustee for Bank and shall be paid over to Bank on account of the Indebtedness, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty. Any security interest, lien, or other encumbrance that Guarantor may now or hereafter have on any property of Borrower is hereby subordinated to any security interest, lien, or other encumbrance that Bank may have on any such property.

 

8.   Revocation of Guaranty.

 

(a)   This Guaranty may be revoked at any time by Guarantor in respect to future transactions. Such revocation shall be effective upon actual receipt by Bank, at the address shown below or at such other address as may have been provided to Guarantor by Bank, of written notice of revocation. Revocation shall not affect any of guarantor’s obligations or Bank’s rights with respect to transactions committed or entered into prior to Bank’s receipt of such notice, nor shall it affect Guarantor’s obligations with respect to any indemnities, executed prior to Bank’s receipt of such notice.

 

(b)  Guarantor acknowledges and agrees that this Guaranty may be revoked only in accordance with the foregoing provisions of this paragraph and shall not be revoked simply as a result of any change in name, location, ownership or composition or structure of Borrower, or the dissolution of Borrower.

 

9. Extent of Guaranty. If Guarantor is a subsidiary or affiliate of Borrower, in addition to the limitations on Guarantor’s liability set forth above in Paragraph 1, Guarantor’s liability hereunder shall not exceed at any one time the largest amount during the period commencing with Guarantor’s execution of this Guaranty and thereafter that would not render Guarantor’s obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any comparable provisions of any applicable state law.

 

10. Taxes.

 

(a) Guarantor represents and warrants that it is organized and resident in the United States of America. All payments by Guarantor hereunder shall be paid in full, without setoff or counterclaim or any deduction or withholding whatsoever, including, without limitation, for any and all present and future taxes. If Guarantor must make a payment under this Guaranty, Guarantor represents 

 

Ref #: 1002474989 : - Sundance Energy, L.P.

Continuing and Unconditional Guaranty 

 

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and warrants that it will make the payment from one of its U.S. resident offices to Bank so that no withholding tax is imposed on the payment. Notwithstanding the foregoing, if Guarantor makes a payment under this Guaranty to which withholding tax applies or if any taxes (other than taxes on net income (i) imposed by the country or any subdivision of the country in which Bank’s principal office or actual lending office is located and (ii) measured by the United States taxable income Bank would have received if all payments under or in respect of this Guaranty were exempt from taxes levied by Guarantor’s country) are at any time imposed on any payments under or in respect of this Guaranty including, but not limited to, payments made pursuant to this paragraph, Guarantor shall pay all such taxes to the relevant authority in accordance with applicable law such that Bank receives the sum it would have received had no such deduction or withholding been made (or, if Guarantor cannot legally comply with the foregoing, Guarantor shall pay to Bank! such additional amounts as will result in Bank receiving the sum it would have received had no such deduction or withholding been made). Further, Guarantor shall also pay to Bank, on demand, all additional amounts that Bank specifies as necessary to preserve the after-tax yield Bank would have received if such taxes had not been imposed.

 

(b) Guarantor shall promptly provide Bank with an original receipt or certified copy issued by the relevant authority evidencing the payment of any such amount required to be deducted or withheld.

 

11.  Information Relating to Borrower. Guarantor acknowledges and agrees that it has made such independent examination, review, and investigation of the Bank Agreements as Guarantor deems necessary and appropriate, and shall have sole responsibility to obtain from Borrower any information required by Guarantor about any modifications to the Bank Agreements. Guarantor further acknowledges that Bank has no duty, and Guarantor is not relying on Bank, at any time to disclose to Guarantor any information relating to the business operations or financial condition of Borrower. “Bank Agreements” shall mean all agreements, documents, and instruments evidencing any of the Indebtedness, including but not limited to all loan agreements between Borrower and Bank and promissory notes from Borrower in favor of Bank, and all deeds of trust, mortgages, security agreements, and other agreements, documents, and instruments executed by Borrower in connection with the Indebtedness, all as now in effect and as hereafter amended, restated, renewed, or superseded.

 

12.  Borrower’s Authorization. Where Borrower is a corporation, partnership, or limited liability company, it is not necessary for Bank to inquire into the powers of Borrower or of the officers, directors, partners, members, managers, or agents acting or purporting to act on its behalf, and any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty, subject to any limitations on Guarantor’s liability set forth in this Guaranty.

 

13.  Guarantor Information; Reporting to Credit Bureaus. Guarantor authorizes Bank to verify or check any information given by Guarantor to Bank, check Guarantor’s credit references, verify employment, and obtain credit reports. Guarantor shall provide such financial statements and other financial information about Guarantor as Bank may request from time to time. Guarantor agrees that Bank shall have the right at all times to disclose and report to credit reporting agencies and credit rating agencies such information pertaining to the Indebtedness and/or Guarantor as is consistent with Bank’s policies and practices from time to time in effect. Guarantor acknowledges and agrees that the authorizations provided in this paragraph apply to any individual general partner of Guarantor and to Guarantor’s spouse and any such general partner’s spouse if Guarantor or such general partner is married and lives in a community property state.

 

14.  Change of Status. Any Guarantor that is a business entity shall not enter into any consolidation, merger, or other combination unless Guarantor is the surviving business entity. Further, Guarantor shall not change its legal structure unless (a) Guarantor obtains the prior written consent of Bank and (b) all obligations of Guarantor under this Guaranty are assumed by the new business entity.

 

15.  Remedies. If Guarantor fails to fulfill its duty to pay all Indebtedness guaranteed hereunder or shall breach or fail to comply with any term or provision of this Guaranty, Bank shall have all of the remedies of a creditor and, to the extent applicable, of a secured party, under all applicable law. Without limiting the foregoing to the extent permitted by law, Bank may, at its option and without notice or demand:

 

Ref #: 1002474989 : - Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

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(a)   declare any Indebtedness due and payable at once;

 

(b)  take possession of any collateral pledged by Borrower or Guarantor, wherever located, and sell, resell, assign, transfer, and deliver all or any part of the collateral at any public or private sale or otherwise dispose of any or all of the collateral in its then condition, for cash or on credit or for future delivery, and in connection therewith Bank may impose reasonable conditions upon any such sale. Further, Bank, unless prohibited by law the provisions of which cannot be waived, may purchase all or any part of the collateral to be sold, free from and discharged of all trusts, claims, rights of redemption and equities of Borrower or Guarantor whatsoever. Guarantor acknowledges and agrees that the sale of any collateral through any nationally recognized broker-dealer, investment banker, or any other method common in the securities industry shall be deemed a commercially reasonable sale under the Uniform Commercial Code or any other equivalent statute or federal law, and expressly waives notice thereof except as provided in this Guaranty; and

 

(c)   set off and apply any and all deposit accounts of Guarantor held by Bank or its affiliates against any and all obligations of Guarantor owing to Bank. The set-off may be made irrespective of whether or not Bank shall have made demand under this Guaranty, and although such obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit accounts and without regard for the availability or adequacy of other collateral. If exercised by Bank, Bank shall be deemed to have exercised such right of setoff and to have made a charge against any such money immediately upon the occurrence of such default although made or entered on the books after such default.

 

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

 

17.  Successors and Assigns. This Guaranty (a) binds Guarantor and Guarantor’s executors, administrators, successors, and assigns, provided that Guarantor may not assign its rights or obligations under this Guaranty without the prior written consent of Bank, and (b) inures to the benefit of Bank and Bank’s endorsees, successors, and assigns. Bank may, without notice to Guarantor and without affecting Guarantor’s obligations, sell participations in, or assign the Indebtedness and this Guaranty, in whole or in part and may exchange information about Guarantor to any actual or potential participants or assignees.

 

18.  Amendments. Waivers, and Severability. No provision of this Guaranty may be amended or waived except in writing. No failure by Bank to exercise, and no delay in exercising, any of its rights, remedies, or powers shall operate as a waiver of such rights, remedies or powers, and no single or partial exercise of any such right, remedy, or power shall preclude any other or further exercise thereof or the exercise of any other right, remedy, or power. The unenforceability or invalidity of any provision of this Guaranty shall not affect the enforceability or validity of any other provision of this Guaranty.

 

19.  Costs and Expenses. Guarantor agrees to pay all reasonable attorneys’ fees and all other costs and expenses that may be incurred by Bank (a) in the enforcement of this Guaranty or (b) in the preservation, protection, or enforcement of any rights of Bank in any case commenced by or against Guarantor under the Bankruptcy Code (Title 11, United States Code) or any similar or successor statute.

 

20.  Representations and Warranties. When Guarantor signs this Guaranty, and until the Indebtedness is repaid in full and any commitments or facilities provided by Bank with respect to the Indebtedness have been terminated. Guarantor makes the following representations and warranties:

 

(a) All financial and other information that has been or will be supplied to Bank is 

 

 

Ref #: 1002474989: - Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

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sufficiently complete to give Bank accurate knowledge of Guarantor’s financial condition, including all material contingent liabilities. Since the date of the most recent financial statement provided to Bank, there has been no material adverse change in the business condition (financial or otherwise), operations, properties or prospects of Guarantor. If Guarantor is comprised of the trustees of a trust, the foregoing representations shall also pertain to the trustor(s) of the trust.

 

(b) There is no lawsuit, tax claim or other dispute pending or threatened against Guarantor which, if lost, would impair Guarantor’s financial condition or ability to repay the Indebtedness, except as have been disclosed in writing to Bank.

 

(c)  Guarantor is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation, except as have been disclosed in writing to Bank.

 

(d) Guarantor has no knowledge of any pending assessments or adjustments of its income tax for any year and all taxes due have been paid, except as have been disclosed in writing to Bank.

 

(e)  There is no event which is, or with notice or lapse of time or both would be, a default by Guarantor under this Guaranty or under any, other instrument or agreement executed in connection with the Indebtedness or this Guaranty.

 

(f)  Guarantor will not be rendered insolvent by the execution, delivery, and performance of its obligations under this Guaranty.

 

(g) Guarantor, if a natural person, has obtained any spousal or other consents or waivers which may be required by applicable law.

 

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

 

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

 

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

 

Ref #: 1002474989: - Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

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THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE.

 

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

 

25.  CONFESSION OF JUDGMENT. (GUARANTOR HEREBY IRREVOCABLY APPOINTS EACH OF STEPHEN A. MAYO AND RUTH F. RILEY, ANY ONE OF WHOM MAY ACT ALONE, AS ITS DULY-CONSTITUTED, TRUE AND LAWFUL ATTORNEY-IN-FACT WITH AUTHORITY, IN THE NAME, PLACE AND STEAD OF GUARANTOR OR ANY OF THEM (IF MORE THAN ONE) TO CONFESS JUDGMENT IN THE OFFICE OF THE CIRCUIT COURT OF THE COUNTY OF FAIRFAX, VIRGINIA, AGAINST GUARANTOR OR ANY OF THEM (IF MORE THAN ONE), IN THE FULL AMOUNT DUE UNDER THIS GUARANTY (INCLUDING, WITHOUT LIMITATION, PRINCIPAL, ACCRUED INTEREST AND LATE FEES) AND ANY MODIFICATION, RENEWAL OR SUBSTITUTION HEREOF, WHETHER NOW OR HEREAFTER EXISTING, PLUS ALL COSTS OF CONFESSING AND ENTERING JUDGMENT (INCLUDING, WITHOUT LIMITATION, ATTORNEY’S FEES), UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT UNDER THIS GUARANTY OR ANY MODIFICATION] RENEWAL OR SUBSTITUTION THEREOF, WHETHER NOW OR HEREAFTER EXISTING. SUCH APPOINTMENT SHALL CONSTITUTE A POWER COUPLED WITH AN INTEREST AND SHALL REMAIN IN EFFECT UNTIL ANY AND ALL INDEBTEDNESS EVIDENCED BY THIS GUARANTY HAS BEEN PAID IN FULL. THE HOLDER OF THIS GUARANTY MAY APPOINT A SUBSTITUTE FOR ANY ATTORNEY-IN-FACT NAMED ABOVE BY SPECIFICALLY NAMING SUCH SUBSTITUTE ATTORNEY-IN-FACT IN AN INSTRUMENT RECORDED AND INDEXED IN THE CLERK’S OFFICE IDENTIFIED ABOVE AS PROVIDED IN VA. CODE SEC. 8.01-435.

 

26.  Counterparts. This Guaranty may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement. Delivery of an executed counterpart of this Guaranty (or of any agreement or document required by this Guaranty and any amendment to this Guaranty) by telecopy or other electronic imaging means shall be as effective as delivery of a manually executed counterpart of this Guaranty; provided, however, that the telecopy or other electronic image shall be promptly followed by an original if required by the Bank.

 

27.  Application of Singular and Plural. In all cases where there is but a single Borrower, then all words used herein in the plural shall be deemed to have been used in the singular where the context and construction so require; and when there is more than one Borrower, or when this Guaranty is executed by more than one Guarantor, the word “Borrower” or “Borrowers” and the word “Guarantor” respectively shall mean all or any one or more of them as the context requires.

 

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

 

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

 

 

Ref #: 1002474989: - Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

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The parties executed this agreement as of February 9, 2017, intending to create an instrument executed under seal.

 

	 	(Seal)
	David S. McKenney, Individually	 

 

Address for notices to Bank:

Doc Retention Center

NC1-001-05-13

One Independence Center

101 North Tryon St.

Charlotte, NC 28255-0001

Facsimile: (866) 255-9922

 

Address for notices to Guarantor:

David S. McKenney

3709 Glades End Ln.

Richmond, VA 23233-1778

 

ACKNOWLEDGMENT

 

STATE OF VIRGINIA

CITY/COUNTRY OF Richmond, to-wit:

 

The foregoing instrument was acknowledged before me, the undersigned Notary Public, in the (City/County and State aforesaid, this 10th day of February 2017, by David McKenney individually, as ________________ of _______________, a _______________ on behalf of the ____________ .

 

My Commission Expires: 12.31.20

 

Notary Registration Number: 7144445

 

	 	 
	Notary Public	 

 

(NOTARIAL SEAL)

 

 

Ref#: 1002474989 : -Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

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

 

These notices apply only to individual Borrowers or Guarantors and individuals who are pledging collateral, granting a lien on real property or are otherwise obligated to the Bank (Obligors):

 

(1)            AFFILIATE SHARING NOTICE

 

From time to time the Bank may share information about the Obligor’s experience with Bank of America Corporation (or any successor company) and its subsidiaries and affiliated companies (the “Affiliates”), including, but not limited to, the Bank of America Companies listed in notice #2 below. The Bank may also share with the Affiliates credit-related information contained in any applications, from credit reports and information it may obtain about the Obligor from outside sources.

 

If the Obligor is an individual, the Obligor may instruct the Bank not to share this information with the Affiliates. The Obligor can make this election by (1) visiting the Bank online at bankofamerica.com/privacy or (2) calling the Bank toll-free at 888.341.5000. To help the Bank complete the Obligor’s request, the Obligor should include the Obligor’s name, address, phone number, account number(s) and social security number.

 

If the Obligor makes this election, certain products or services may not be made available to the Obligor. This request will apply to information from applications, consumer reports and other outside sources only. Through the normal course of doing business, including servicing the Obligor’s accounts and better serving the Obligor’s financial needs, the Bank will continue to share transaction and account experience information, as well as other general information among the Affiliates.

 

(2)            AFFILIATE MARKETING NOTICE - YOUR CHOICE TO LIMIT MARKETING

 

	●	 	The Bank of America companies listed below are providing this notice #2.
	 	 	 
	●	 	Federal law gives you the right to limit some but not all marketing from all the Bank of America affiliated companies. Federal law also requires us to give you this notice to tell you about your choice to limit marketing from all the Bank of America affiliated companies.
	 	 	 
	●	 	You may limit all the Bank of America affiliated companies, such as the banking, loan, credit card, insurance and securities companies, from marketing their products or services to you based upon your personal information that they receive from other Bank of America companies. This information includes your income, your account history, and your credit score.
	 	 	 
	●	 	Your choice to limit marketing offers from all the Bank of America affiliated companies will apply for at least 5 years from when you tell us your choice. Before your choice to limit marketing expires, you will receive a renewal notice that will allow you to continue to limit marketing offers from all the Bank of America affiliated companies for at least another 5 years.
	 	 	 
	●	 	You may tell us your choice to limit marketing offers and you may tell us the choices for other customers who are joint account holders with you.
	 	 	 
	●	 	This limitation will not apply in certain circumstances, such as when you have an account or service relationship with the Bank of America company that is marketing to you.
	 	 	 
	●	 	For individuals with business purpose accounts, this limitation will only apply to marketing to individuals and not marketing to a business.

 

Ref #: 1002474989: - Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

	-10-

	 

 

To limit marketing offers, contact us at 888.341.5000

 

Bank of America Companies:

 

This notice applies to all Bank of America entities that utilize the names:

 

Bank of America

Banc of America

U.S. Trust

Merrill Lynch

 

These entities include banks and trust companies; credit card companies; brokerage and investment companies; insurance and annuities companies; and real estate companies.

 

In addition, this notice applies to the following Bank of America companies:

 

Managed Account Advisors LLC

General Fidelity Life Insurance Company

NationsCredit Financial Services Corporation

BAL Corporate Aviation, LLC

BAL Energy Holding, LLC

BAL Energy Management II, LLC

BAL Investment & Advisory, Inc.

 

Ref #: 1002474989: - Sundance Energy, L.P.

Continuing and Unconditional Guaranty

 

-11-Exhibit

 

	
					
	|Confidential   Execution Version

	 
	Dated October 27, 2016
	 

	 

	BULK NORDIC FIVE LTD. 
(as Seller)

AND
NICOLE NAVIGATION S.A.
(as Buyer)

	 
	

PURCHASE AGREEMENT
relating to one 59,000 DWT Ice Class Ultramax bulk carrier named BULK DESTINY

	 

	NORTON ROSE FULBRIGHT

 

 

Contents
Clause    Page
1 Definitions and interpretation    1
2 Representations and warranties    5
3 Conditions precedent    6
4 Acquisition Completion    7
5 Payment    8
6 Sale of the Vessel    8
7 Spare parts and bunkers    9
8 Extent of Seller's liability in respect of sale    9
9 Expenses    10
10    Counterparts    10
11    Notices    10
12    Miscellaneous    11
13    Governing law and jurisdiction    11
Schedule 1 Form of Bill of Sale and Acceptance    13
Schedule 2 Form of Protocol of Delivery and Acceptance    15

 

 

THIS AGREEMENT is made on October 27, 2016
BETWEEN:
		
	(1)
	BULK NORDIC FIVE LTD., a Bermuda exempted company incorporated under the laws of Bermuda with company number 48423 and having its registered office at3rd Floor, Par la Ville Place, 14 Par la Ville Road, Hamilton HM08, Bermuda (the Seller); and

		
	(2)
	NICOLE NAVIGATION S.A. a company incorporated in Panama, having its registered office at Paseo del Mar and Pacific Avenues, Costa del Este, MMG Tower, 23rd Floor, Panama City, Republic of Panama (the Buyer).

The Seller and Buyer are each Party to this Agreement and are referred to collectively as the Parties.
WHEREAS:
		
	(A)
	By a shipbuilding contract entered into between the Builder and Sumitomo, the Builder agreed to design, build, launch, complete and deliver the Vessel (each as defined below).

		
	(B)
	By the Construction and Sale Agreement entered into between Sumitomo (as contractor) and the Seller (as buyer), Sumitomo agreed to sell and the Seller agreed to buy the Vessel. 

		
	(C)
	As a part of the financing arrangements for the Vessel the Seller has agreed to sell and the Buyer has agreed to buy the Vessel pursuant to the terms of this Agreement and the Quadpartite Agreement.

		
	(D)
	Following the sale of the Vessel under this Agreement the Vessel shall be chartered to the Seller by the Buyer under the Bareboat Charter (as defined below).

IT IS AGREED AS FOLLOWS:
		
	1
	Definitions and interpretation

		
	1.1
	Definitions

In this Agreement:
Acquisition Completion is the event which occurs upon all the transactions specified in clause 4.2 taking effect
Bareboat Charter means the bareboat charter agreement dated on or about the date of this Agreement between the Seller (as bareboat charterer) and the Buyer (as the owner)
Board of Directors means the board of directors of the Seller
Builder means Oshima Shipbuilding Co., Ltd. a company incorporated under the laws of Japan with its registered address at 1605-1, Oshima-cho, Saikai-shi, Nagasaki-ken, 857-2494, Japan
Business Day means a day on which Banks are open for general business in Tokyo, New York and London
Compulsory Acquisition means requisition for title or other compulsory acquisition, requisition, appropriation, expropriation, nationalisation, deprivation, forfeiture or confiscation for any reason of the Vessel by any Government Entity or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title

1

 

Construction and Sale Agreement means the construction and sale agreement dated 2 December 2013 between Sumitomo (as contractor) and the Seller (as buyer), as amended from time to time, including but not limited to the Quadpartite Agreement
Fee Letter means the fee letter setting out amongst other things the total amount of the Upfront Fee (as defined in the Bareboat Charter) payable to the Buyer by the Seller dated on or about the date of the Bareboat Charter
Government Entity means (whether having a distinct legal personality or not): (a) any government or any governmental, semi-governmental or judicial entity or authority, including any local or state government; and (b) any board, commission, department, division, organ, instrumentality, court or agency of any such entity, however constituted
Indirect Tax means any goods and services tax, consumption tax, sales tax, VAT or other value added tax or any tax of a similar nature (however so described)
Insolvency Event means, in relation to any person, the occurrence of any of the following events:
		
	(a)
	Insolvency: that person is unable or admits inability to pay its debts as they fall due, or is deemed to, or is declared to, be unable to pay its debts under applicable law, or becomes insolvent or stops or suspends making payments (whether of principal or interest) with respect to all or any class of its debts or announces an intention to do so or moratorium is declared in respect of that person's indebtedness;

		
	(b)
	The value of the assets of that person is less than its liabilities (taking into account contingent and prospective liabilities);

		
	(c)
	Insolvency Proceedings: any order is made, petition is presented, any meeting is convened for the passing of a resolution or other act or action is taken for the winding-up, liquidation, administration or commencement of other formal insolvency proceedings of that person in any jurisdiction;

		
	(d)
	Appointment of receivers and managers: any administrative or other receiver or trustee or other court or creditor designated insolvency officer is appointed of that person or any material part of its assets or any other steps are taken to enforce any Security Interest over all or any material part of the assets of that person;

		
	(e)
	Analogous proceedings: there occurs, in relation to that person in any jurisdiction, any event which corresponds with, or has an effect equivalent or similar to, any of the events mentioned in the foregoing paragraphs; or

		
	(f)
	Composition or voluntary arrangement: any step (including petition, proposal or convening a meeting) is taken with a view to a composition, assignment or arrangement with any creditors of that person

Legal Reservations means:
		
	(a)
	the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

		
	(b)
	the time barring of claims under the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for, or indemnify a person against, non-payment of any stamp duty may be void and defences of set-off or counterclaim; and

		
	(c)
	similar principles, rights and defences under the laws of any Relevant Jurisdiction

2

 

Loan means the principal amount of the borrowing under the Loan Agreement or the principal amount from time to time owing under the Loan Agreement
Loan Agreement means the facility agreement dated on or around the date of this Agreement between the Buyer (as borrower) and Sumitomo Mitsui Finance and Leasing Co., Ltd. (as lender) pursuant to which Sumitomo Mitsui Finance and Leasing Co., Ltd. provided or will provide a loan facility to the Buyer to assist with the purchase of the Vessel pursuant to this Agreement
Pangaea means Pangaea Logistics Solutions Ltd., an exempted company incorporated in Bermuda with company number 49020 and with its registered address at3rd Floor, Par la Ville Place, 14 Par la Ville Road, Hamilton HM08, Bermuda.
Pangaea Guarantee means the irrevocable and on demand guarantee dated on or about the date of the Bareboat Charter granted by Pangaea in favour of the Buyer guaranteeing all obligations owed by the Seller to the Buyer under the Transaction Documents and in form and substance satisfactory to the Buyer
Protocol of Delivery and Acceptance means the protocol of delivery and acceptance in respect of the Vessel executed by the Seller and the Buyer and substantially in the form attached to Schedule 2 of this Agreement or otherwise agreed by the Seller and Buyer
Purchase Price means twenty one million U.S. Dollars (US$21,000,000) and being exclusive of any Taxes including indirect Taxes
Quadpartite Agreement means the agreement dated on or about the date of this Agreement entered into between the Builder, Sumitomo, the Charterer and the Owner in connection with the delivery and the purchase of the Vessel by the Owner
Relevant Jurisdiction means in relation to any person:
		
	(a)
	its jurisdiction of incorporation;

		
	(b)
	any jurisdiction where any asset subject to or intended to be subject to the Security Documents to be created is situated or registered;

		
	(c)
	any jurisdiction where it conducts its business; and

		
	(d)
	the jurisdiction whose laws govern the perfection of any of the Security Documents

Security Assets means, amongst other rights, the rights of the Seller in and to insurances and requisition compensation in respect of the Vessel assigned or to be assigned by it pursuant to the Security Assignment 
Security Assignment means the agreement pursuant to which the Seller (as bareboat charterer) assigns in favour of the Buyer certain interests with respect to the Vessel including, amongst other things, the insurances, insurance proceeds and requisition compensation in respect of the Vessel.
Security Documents means the Security Assignment and the Pangaea Guarantee and any documents ancillary to those documents
Security Interest means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, security interest, title retention or other encumbrance securing, or any right conferring a priority of payment in respect of, any obligation of any person
Sumitomo means Sumitomo Corporation a company incorporated under the laws of Japan with its registered office at Harumi Island Triton Square Office Tower Y, 8-11 Harumi 1-chome, Chuo-ku, Tokyo 104-8610 Japan

3

 

Tax means any present and/or future tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same)
Total Loss means in relation to the Vessel, its:
		
	(a)
	actual or constructive or compromised or agreed or arranged total loss, as applicable, including such loss as may arise during a requisition for hire;

		
	(b)
	Compulsory Acquisition;

		
	(c)
	confiscation, seizure, condemnation, arrest, restraint, or disappearance of the Vessel, as applicable, (other than by reason of Compulsory Acquisition) which deprives the Seller of the use of the Vessel for a period in excess of thirty (30) days from the relevant event occurring;

		
	(d)
	any hijacking, piracy, theft, capture or detention of the Vessel, as applicable, (other than by reason of Compulsory Acquisition) which deprives the Seller of the use of the Vessel, as applicable, for a period in excess of sixty (60) days from the relevant event occurring; or

		
	(e)
	any requisition for hire or use of the Vessel, as applicable, for more than sixty (60) days (or such longer period as the Buyer may agree)

Transaction Documents means the following documents:
		
	(a)
	this Agreement;

		
	(b)
	the Quadpartite Agreement;

		
	(c)
	the Bareboat Charter;

		
	(d)
	the Security Assignment;

		
	(e)
	the Fee Letter;

		
	(f)
	the Vessel Mortgage;

		
	(g)
	the Loan Agreement;

		
	(h)
	any Manager's Undertaking (as such term is referred to in the Bareboat Charter);

		
	(i)
	the Pangaea Guarantee; and

		
	(j)
	all notices and acknowledgements provided for in the Security Assignment and any Managers Undertaking (as such term is referred to in the Bareboat Charter)

US$ or U.S. Dollars means the lawful currency from time to time of the United States of America
Vessel means the 59,000 DWT Ice Class Ultramax bulk carrier named “Bulk Destiny” bearing hull number 10762 which upon delivery to the Buyer pursuant to the terms and conditions of this Agreement, will be registered under the demise charter registration in and under the laws and flag of Panama with the Buyer as the registered owner and the Seller as the demise charterer
Vessel Mortgage means the Panamanian law vessel mortgage to be granted by the Buyer in favour of the lender(s) under the Loan Agreement over the Vessel
		
	1.2
	Headings

4

 

Clause headings and the index are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
		
	1.3
	References

In this Agreement, unless the context otherwise requires:
		
	(a)
	references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement include its schedules;

		
	(b)
	references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties;

		
	(c)
	references to a "law" include references to any regulation, statute, ordinance, treaty or other legislative measure or any present or future direction, request, requirement or rule of any government or any agency of any state or any self-regulating organisation (whether or not having the force of law but if not having the force of law only if compliance therewith is in accordance with the general practice of persons to whom the same applies);

		
	(d)
	words importing the plural shall include the singular and vice versa;

		
	(e)
	references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons, partnership, joint venture, association, joint stock company, trust or any Government Entity;

		
	(f)
	references to a time of day are to Tokyo time; 

		
	(g)
	references to any enactment shall be construed as references to such enactment as re-enacted, amended or extended; and

		
	(h)
	references to any person include the successors and permitted assigns of such person.

		
	2
	Representations and warranties

The Seller represents and warrants to the Buyer on the date of this Agreement and on Acquisition Completion, that the following statements are true and accurate;
		
	(a)
	it is duly incorporated as an exempted company in good standing under the laws of Bermuda and has full power to carry on its business as it is now being conducted and to own its property and other assets and has full power and authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated by this Agreement;

		
	(b)
	the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorised by all necessary corporate and other action on its part and do not contravene any applicable law, order or regulation, judgement, decree or permit binding on it or any of its assets or its constitutional documents;

		
	(c)
	neither the execution, delivery and performance by it of this Agreement, nor the consummation of any of the transactions by it contemplated by this Agreement, require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any governmental authority or agency or any court, except such as have been obtained (or will have been obtained at the time of Acquisition Completion) and are in full force and effect;

5

 

		
	(d)
	no default or termination event (however so described) has occurred under the Transaction Documents nor has any Insolvency Event occurred in relation to itself or Pangaea;

		
	(e)
	immediately prior to Acquisition Completion it is the sole legal and beneficial owner of the (i) Vessel (subject to completion of the purchase in accordance with the Contract of Construction and Sale) and the (ii) Security Assets which it will assign in favour of the Buyer pursuant to the Security Documents to which it is party and it has not sold or transferred all or any part or interest in the Vessel or such Security Assets to a third party nor has it created or permitted any Security Interests over all or any part of the Vessel or such Security Assets other than in favour of the Buyer; 

		
	(f)
	subject to Legal Reservations, each of the Security Documents to which it is a party is effective to create the legal, valid and enforceable Security Interest which is expressed to be created thereby; and

		
	(g)
	subject to Legal Reservations, this Agreement constitutes, its legal, valid and binding obligations.

		
	3
	Conditions precedent

		
	3.1
	The obligation of the Buyer to buy the Vessel hereunder shall be conditional upon:

		
	(a)
	the  Buyer receiving in a form satisfactory to it (i) all documentation necessary for any preliminary registration of the Vessel in the relevant ship registry (if required) together with (ii) all documents required by such registry, the Vessel insurers and any other third party in connection with the Vessel, each to be received with sufficient time to allow the Buyer to approve and execute such documents and the Seller to then register and process such documents and registrations in time for Acquisition Completion;  

		
	(b)
	the Buyer having received from the Seller (i) a copy of the constitutional documents of the Seller (being the memorandum of association and bye-laws and the amendments thereto reflecting the latest and complete bye-laws and certificate of incorporation (and certificate of incorporation on change of name, if any), the latest shareholding composition and its register of directors and officers); (ii) a copy of the corporate resolutions of the Seller (being the resolutions of the shareholders and the Board of Directors) approving the sale of the Vessel and the execution, delivery and performance of this Agreement, the Transaction Documents to which it is party and any documents ancillary thereto and authorising its officers and/or attorneys in fact to execute, deliver and perform this Agreement, the Transaction Documents to which it is party and any documents ancillary thereto and to give all notices and take all other action on behalf of the Seller; (iii) to the extent applicable, a copy of any power of attorney granted by the Seller in connection with its execution of this Agreement and the Transaction Documents to which it is party and any ancillary documents thereto, in each case, certified by a duly authorised person of the Seller, as true, complete, accurate and neither amended nor revoked and (iv) certificate (signed by an authorised representative of the Seller in accordance with its bye-laws) certifying that each copy document relating to it specified in this clause 3 is correct, complete, in full force and effect as at a date no earlier than the date of this Agreement; 

		
	(c)
	the Buyer having received from the Seller a provisional certificate of ownership and encumbrance issued by the competent authorities of the flag state of the Vessel not more than three (3) Business Days before the date of Acquisition Completion evidencing (i) the Buyer’s ownership of the Vessel, and (ii) that the Vessel is free from registered mortgages and encumbrances; 

		
	(d)
	the Buyer having received the originals or certified true copy of the executed and dated Transaction Documents;

6

 

		
	(e)
	the Buyer having received from the Seller a copy of all documents the Seller has received from Sumitomo and the Builder pursuant to delivery of the Vessel under the terms of the Construction and Sale Agreement as set out in Article VII(3) therein and clause 2 of the Quadpartite Agreement (each in a form and substance satisfactory to the Buyer), with each certified by a duly authorised signatory of the Seller, as true, complete, accurate and neither amended nor revoked 

		
	(f)
	the Buyer having received from the Seller a copy of the report from the Buyer's insurance adviser in form and substance satisfactory to the Buyer confirming that the Compulsory Insurances (as such term is defined in the Bareboat Charter) in relation to the Vessel are, or will be, in force at the Delivery (as such term is defined in the Bareboat Charter);

		
	(g)
	the Buyer having received from the Seller the Upfront Fee (as such term is defined in the Fee Letter);

		
	(h)
	each of the representations and warranties stated by the Seller in clause 2 hereof being true and correct;

		
	(i)
	each of the Transaction Documents being in full force and effect and no event of default or termination event (however so described) having occurred under any of them;

		
	(j)
	the Vessel not having suffered a Total Loss nor any damage which in the reasonable opinion of the Buyer (acting on the advice of appropriate advisors) means the Vessel may be or become a Total Loss;

		
	(k)
	evidence satisfactory to the Buyer that arrangements for the registration, filing and stamping of the Security Documents and the Vessel Mortgage with the relevant registries of the Relevant Jurisdictions are capable of being satisfied on Delivery (as such term is defined in the Bareboat Charter);

		
	(l)
	the Buyer being satisfied that each of the conditions precedent under clause 3 of the Bareboat Charter have been satisfied or will be satisfied at the time of Delivery (as such term is defined in the Bareboat Charter);

		
	(m)
	the Buyer having received or being satisfied that it will receive on Acquisition Completion all other documents, in form satisfactory to the Buyer, evidencing that the Buyer shall receive the Vessel with good title free of any Security Interests on Acquisition Completion together with such other documents and evidence as the Buyer may reasonably require,

provided that all of the conditions precedent at clause 3.1(a) to (m) inclusive are satisfied by 31 March 2017.
		
	3.2
	The Seller and the Buyer agree that, in the event of a Total Loss or where the Bareboat Charter has been terminated (each prior to delivery of the Vessel under this Agreement), this Agreement shall be void and neither party shall have any obligations hereunder other than to refund (with interest) any payment received hereunder, if any. 

		
	4
	Acquisition Completion

		
	4.1
	Acquisition Completion shall occur at such time and date as the Buyer and the Seller may mutually agree following the fulfilment or waiver of all the conditions precedent set out in clause 3, whereupon the following transactions will take effect in the order shown in clause 4.2 provided that if any one of such transactions is not completed then no transaction shall take effect and the Seller shall repay any moneys received by it hereunder, if any, and the Buyer shall cooperate with the Seller, at the Seller’s cost, to cause the transfer or otherwise amend the preliminary registration of the Vessel under the Panamanian flag from the Buyer to the Seller. 

		
	4.2
	The transactions which take effect at Acquisition Completion are:

7

 

		
	(a)
	payment by the Buyer to Sumitomo of eighteen million eight hundred and forty five thousand U.S. Dollars (US$18,845,000);   

		
	(b)
	payment by the Buyer to the Seller of two million one hundred and fifty five thousand U.S. Dollars (US$2,155,000); and 

		
	(c)
	delivery of the Vessel by the Seller to the Buyer and execution and delivery by the Seller to the Buyer of a bill of sale in respect of the Vessel in accordance with clause 6.4.

		
	4.3
	If the Seller and Sumitomo propose the moneys to be paid at Acquisition Completion are to vary from those detailed in clause 4.2(a) and (b) above, the Seller shall procure it, together with Sumitomo, notifies the Buyer of such variation no later than 10 (ten) days before Acquisition Completion. For the avoidance of doubt the Buyer’s written approval shall be required for any such variation. 

		
	5
	Payment

		
	5.1
	The payments to the persons set out above in clause 4.2 shall be made to the following account or other account as designated by the Seller on a conditional basis:

Seller Account
Account number:    
Account name:    
Account with:
Sort code:    
BIC/SWIFT:    
IBAN:    
Sumitomo Account
Account number:    
Account name:    
Account with:    
Sort code:    
BIC/SWIFT:    
IBAN:    

		
	5.2
	Each payment under this Agreement shall be paid in U.S. Dollars in immediately available cleared funds and free of bank charges.

		
	5.3
	All payments to be made by each party hereunder shall be made in full without any set-off or counterclaim whatsoever and free and clear of all deductions or withholdings whatsoever save only as may be required by law.

8

 

		
	6
	Sale of the Vessel 

		
	6.1
	The Seller shall sell the Vessel to the Buyer and the Buyer shall purchase the Vessel in each case upon and subject to the terms and conditions of this Agreement, free from all Security Interests, in consideration of the payment by the Buyer to the Seller of the Purchase Price.

		
	6.2
	Subject to the terms and conditions of this Agreement, delivery of the Vessel shall be deemed to take place wherever the Vessel may be at the time of Acquisition Completion.

		
	6.3
	At least five (5) Business Days before the expected Acquisition Completion, subject to and in accordance with the terms and conditions of this Agreement and MT199 Swift messages in form and substance satisfactory to each of the Seller’s nominated bank, Sumitomo's nominated bank, the Buyer, Sumitomo and the Seller, the Buyer shall make the payments set out in clause 4.2 to a suspense account of Sumitomo’s nominated bank and the Seller's nominated bank (as applicable) on a conditional basis and such payments shall be released to the Seller's designated bank account and Sumitomo’s designated bank account (as applicable) as detailed in clause 5.1 upon delivery of the Vessel from the Seller to the Buyer and as evidenced by the signing of the Protocol of Delivery and Acceptance (substantially in the form as set out in Schedule 2 hereto) by authorised representatives of the Seller and the Buyer respectively. For the avoidance of doubt any interest earned on the moneys to be paid to the suspense account in accordance with clause 4.2 shall be for the Buyer only.

		
	6.4
	Subject to the terms and conditions of this Agreement, the transfer of all of the Seller's rights, title and interest and risk in and to the Vessel on Acquisition Completion shall be effected by delivery to the Buyer of a bill of sale, substantially in the form of Schedule 1 Part A to this Agreement, duly notarised and legalised or apostilled as necessary and upon such delivery, all of such rights, title, interest and risk of the Seller in and to the Vessel shall pass from the Seller to the Buyer.

		
	6.5
	Immediately following the delivery of such bill of sale to the Buyer:

		
	(a)
	the Seller and the Buyer shall both sign a Protocol of Delivery and Acceptance substantially in the form set out at Schedule 2 to this Agreement confirming the time of delivery of the Vessel to the Buyer; and

		
	(b)
	the Buyer shall sign an acceptance of the bill of sale for the purposes of the registration of the transfer of title with the flag state, substantially in the form of Schedule 1 Part B, duly notarised and legalised or apostilled as necessary.

		
	6.6
	At Acquisition Completion, the Seller shall, at its expense (and shall use its reasonable endeavours to procure that any third parties shall), promptly execute and deliver all documents, and do all things, that the Buyer as registered owner and the Seller as demise charterer may on and following Acquisition Completion reasonably require for the purpose of transferring and registering the transfer of the title to the Vessel in the name of the Buyer and otherwise for giving full effect to the provisions of this Agreement, it being understood that any expenses incurred by the Buyer to procure the documents set forth in clause 2 of the Quadpartite Agreement shall be at the cost of the Seller.

		
	7
	Spare parts and bunkers

		
	7.1
	The Seller shall deliver the Vessel to the Buyer with everything belonging to her (and the property of the Seller) on board and on shore.  All spare parts and spare equipment including spare tail‐end shaft(s) and/or spare propeller(s)/propeller blade(s), if any, belonging to the Seller, used or unused, whether on board or not shall upon Acquisition Completion become the Buyer's property.  The Seller shall not be obliged to replace spare parts including spare tail‐end shaft(s) and spare propellers/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the property of the Buyer.  The radio installation and navigational equipment shall be included in the sale without extra payment, if same is the property of the Seller.  

9

 

The master's, officer's and crew's personal belongings including slop chest shall be excluded from the sale.
		
	7.2
	It is acknowledged by the parties hereto, that any remaining unused stores and unbroached lubricating oils and bunkers on board the Vessel at the time of Acquisition Completion belong to the Seller and are excluded from the sale.

		
	8
	Extent of Seller's liability in respect of sale

		
	8.1
	The Seller warrants to the Buyer that:

		
	(a)
	immediately prior to delivery of the bill of sale to the Buyer, the Seller will have a good and valuable right to transfer title to the Vessel; and

		
	(b)
	all of Seller’s right, title and interest to the Vessel will be free from all Security Interests.

		
	8.2
	As between the Seller and the Buyer, the Vessel, with everything belonging to her (together with any property of the Seller), shall be at the Seller's risk until Acquisition Completion.

		
	9
	Expenses

		
	9.1
	The Seller shall pay all stamp, transfer, documentary, translation, registration or other like duties or sale taxes (including but not limited to any Taxes and Indirect Taxes) imposed on or otherwise arising in connection with the sale of the Vessel. 

		
	9.2
	The Seller shall upon demand indemnify the Buyer against all costs and expenses (including legal fees) in connection with the purchase of the Vessel hereunder including but not limited to the sale of the Vessel not proceeding other than as a direct result of the Buyer's wilful default or gross negligence.

		
	10
	Counterparts

This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts shall together constitute one and the same Agreement.
		
	11
	Notices

Any notice required or authorised to be given under this Agreement shall be served by being delivered by hand or sent by first class post or fax to the party for whom it is intended at the address of such party given below:
		
	11.1
	To the Seller:

Bulk Nordic Five Ltd.
c/o Phoenix Bulk Carriers (US) LLC
Long Wharf, Newport, Rhode Island, United States of America
Fax: +1.401.846.1520
Attention:  Mr. Neil McLaughlin
Email:   nmclaughlin@phoenixbulkus.com
To the Buyer:

10

 

Nicole Navigation S.A.
c/o Sumitomo Mitsui Finance and Leasing Co., Ltd.
1-3-2, Marunouchi, Chiyoda-ku, Tokyo, 100-8287, Japan
Fax:    +81-3-52196574 / +1-212-224-4865
Attention:    Mr.Tomoyuki Tsuji / Mr.Mitsunori Owada
E-mail: tsuji-t@smfl.co.jp / mitsunori_owada@smflus.com
Any notice so served shall be deemed to have been given by fax when sent (provided that the relevant confirmation of receipt has been received) or, if given by first class post at the expiration of 3 days after it shall have been posted.
		
	12
	Miscellaneous

		
	12.1
	Third Parties Act

A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
		
	12.2
	Waivers

No failure or delay on the part of the either party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise by a party of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
		
	12.3
	Remedies cumulative

The remedies provided in this Agreement are cumulative and are not exclusive of any remedies provided by law.
		
	12.4
	Partial illegality

If any term or provision of this Agreement or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable, the remainder of this Agreement and application of such term or provision to persons or circumstances (other than those as to which it is already invalid or unenforceable) shall not be affected thereby and each term and provision of this Agreement shall be valid and be enforceable to the fullest extent permitted by law.
		
	12.5
	Variation

This Agreement shall only be varied by an instrument in writing executed by the parties hereto.
		
	12.6
	Assignment

The Seller may not assign or transfer any of its rights or obligations under this Agreement. 
		
	13
	Governing law and jurisdiction

		
	13.1
	Law

This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.

11

 

		
	13.2
	Jurisdiction

		
	(a)
	The courts of England have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including any dispute relating to any non-contractual obligation arising from or in connection with this Agreement and any dispute regarding the existence, validity or termination of this Agreement (a Dispute).

		
	(b)
	The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

		
	(c)
	This clause 13.2 is for the benefit of the Buyer only. As a result, the Buyer shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Buyer may take concurrent proceedings in any number of jurisdictions. 

IN WITNESS whereof each of the parties hereto has entered into this Agreement the day and year first above written.

 

12

 

Schedule 1 
Form of Bill of Sale and Acceptance  

Part A - BILL OF SALE

13

 

	
									
	Prescribed by the Commissioners of Customs & Excise 
With the consent 
Of the Secretary 
Of State for Trade 
and Industry
	   Form No. 10A                                                X.S.79A
BILL OF SALE (Body Corporate)

	 

	Permanent Patente number
	Name of Ship
	Built, year and port of registry
	Whether a sailing, steam or motor ship
	Total Engine Power

	Official No. 
IMO No. 
	BULK DESTINY
	, Panama
	Motor Ship
	KW

	 
	Metres
	Number of Tons

	Length Registered
	 
	 
	Gross
	Net

	Breadth
	 
	 
	 
	 

	Moulded Depth
	 
	 

	And as described in more detail in the Register Book

	         We, _______________________, (hereinafter called “the Transferors”) having our registered office at [l] , in consideration of the sum of United States Dollars ______________________________ Only (US$______________) in cash paid to us by ________________, having their registered office at _____________________________ (hereinafter called “the Transferee(s)”) the receipt whereof is hereby acknowledged, transfer all (100%) shares in the Ship above particularly described, and in her boats and appurtenances, to the said Transferee(s).

        Further, we, the said Transferors for ourselves and our successors covenant with the said Transferee(s) and their assigns, that we have power to transfer in manner aforesaid the premises hereinbefore expressed to be transferred, and that the same are free from any and all encumbrances, mortgages, maritime liens or any other debts and claims whatsoever.
        In witness whereof we have hereunto executed this bill of sale on this ____________________ 2016. 

EXECUTED and DELIVERED as a DEED      )
for and on behalf of      )
__________________________________      )
By              )

	 

14

 

15

 

Schedule 2     
Form of Protocol of Delivery and Acceptance
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, Bulk Nordic Five Ltd., an exempted company, incorporated in Bermuda (the Seller), have sold and do hereby grant, transfer and deliver at ________________________ at      :      hours (Tokyo Time) on this _______ day of ___________, 2017 unto Nicole Navigation S.A. of Panama (the "Buyer") all its title, rights and interest in and to one (1) newbuild Motor Vessel named "Bulk Destiny" (hereinafter called the "Vessel"), together with all equipment of whatever nature now on board the Vessel, and free from all claims, taxes, charters, mortgages, encumbrances and maritime liens or any other debts or claims whatsoever, in accordance with the provisions of the Purchase Agreement dated the [l], 2016 (the Purchase Agreement), made by and between the Seller and the Buyer.
The Buyer does hereby accept delivery, title and risks of and to the Vessel from the date and time and at the place stated above hereof in accordance with the provisions of the Purchase Agreement and the Quadpartite Agreement.
The Seller :
Bulk Nordic Five Ltd. 
By:  ....................................................
Name: ................................................
Position: .............................................
The Buyer :
Nicole Navigation S.A.
By:  ....................................................
Name: ................................................
Position: .............................................

16

 

EXECUTION PAGE
Seller
SIGNED by         )
Name: Arthur E.M. Jones   Don P. Dunstan          )
            Director                   Director
as authorised signatory for and on behalf of        )
BULK NORDIC FIVE LTD.        )    Signed: /s/ Arthur E.M. Jones
Signed: /s/ Don P. Dunstan

Buyer
SIGNED by    )
Name: Tetsutaro Hiraoka    )
as authorised signatory for and on behalf of    )
NICOLE NAVIGATION S.A.    )    Signed: /s/ Tetsutaro Hiraoka

17

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