ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (this "Agreement") is made and
entered as of May 14, 1998, by and between Frontier Natural Gas Corporation,
an Oklahoma corporation ("Frontier"), and Esenjay Petroleum Corporation, a
Texas corporation ("Esenjay").
W I T N E S S E T H:
WHEREAS, Frontier, Esenjay and Aspect Resources LLC ("Aspect") entered
into that certain Acquisition Agreement and Plan of Exchange, dated as of
January 19, 1998 (the "Acquisition Agreement"), providing for, among other
things, the transfer to Frontier of certain of the assets and properties of
Esenjay, in consideration of the payment by Frontier to Esenjay of the shares
of common stock of Frontier set forth in the Acquisition Agreement, and the
assumption by Frontier of certain of the liabilities and obligations of
Esenjay; and
WHEREAS, all of the instruments, documents and agreements required to be
executed and delivered in order to consummate the transactions provided in
the Acquisition Agreement are being executed by and delivered to the
respective parties to the Acquisition Agreement concurrently herewith;
NOW, THEREFORE, in consideration of the premises and the transfer by
Esenjay concurrently herewith of the Esenjay Assets (as defined in the
Acquisition Agreement), in accordance with and pursuant to the Acquisition
Agreement, the parties hereby agrees as follows:
1. All capitalized terms used but not defined herein shall have the
meaning ascribed to them in the Acquisition Agreement.
2. Frontier hereby assumes and agrees to pay or perform in accordance
with their terms, the following obligations and liabilities of Esenjay
(collectively the "Assumed Liabilities"), as follows:
(a) those liabilities of Esenjay in an amount not to exceed
$1,000,000 set forth on Schedule 1 attached hereto;
(b) the obligations and liabilities of Esenjay arising after the
date hereof under the Assumed Agreements; provided, however, that
Frontier does not assume any liability arising out of the performance or
nonperformance of, or a violation, breach or default (including any
event which with notice or lapse of time or both will give rise to a
default) by, Esenjay prior to the date hereof;
(c) the properly accrued vacation and sick leave obligations of
Esenjay for those employees of Esenjay who accept employment with
Frontier, in an amount not to exceed $102,044 in the aggregate;
(d) the obligations and liabilities of Esenjay arising after the
date hereof under the agreements, contracts and commitments relating to
the Esenjay Assets (the "Assumed Contracts"); provided, however, that
Frontier does not assume any liability arising out of the performance or
nonperformance of, or a violation, breach or default (including any
event which with notice or lapse of time or both will give rise to a
default) by, Esenjay prior to the date hereof; and
(e) all Post Effective Date Costs relating to the Esenjay Assets
incurred after the Effective Date and remaining unpaid as of the date
hereof.
3. Esenjay hereby assigns to Frontier all of its right, title and
interest in, to and under the Assumed Contracts and the Assumed Agreements,
except to the extent the Assumed Contracts relate to assets ("Retained
Assets") in which Esenjay will continue to have an interest after the
transfers contemplated hereby and by the Acquisition Agreement, in which case
Esenjay retains rights, coterminous with those assigned to Frontier
hereunder, with respect to the Retained Assets.
4. Esenjay expressly understands and agrees that except for the Assumed
Liabilities, Frontier has not agreed to pay, shall not be required to assume,
and shall have no liability or obligation, direct or indirect, absolute or
contingent, arising out of or related the liabilities of Esenjay existing on
or arising after the date hereof. It is expressly understood and agreed that
all liabilities, obligations and commitments not assumed hereunder by
Frontier shall remain, as between Frontier, on the one hand, and Esenjay, on
the other hand, the sole obligation of Esenjay and its respective successors
and assigns.
5. Nothing herein shall be deemed to deprive Frontier of any defenses,
setoffs or counterclaims (collectively, "Defenses") which Esenjay may have had
or which Frontier shall have with respect to any of the obligations,
liabilities or commitments assumed hereby. Esenjay hereby transfers, conveys
and assigns to Frontier all Defenses and agrees to reasonably cooperate with
Frontier to maintain, secure, perfect and enforce the Defenses.
6. Frontier further covenants and agrees with Esenjay that Frontier
will do, execute and deliver, or cause to be done, executed and delivered,
all such further instruments, documents, agreements and assurances as may be
reasonably requested by Esenjay, which may be necessary in order to evidence
and provide for the specific assumption by Frontier of any one or more of the
Assumed Liabilities.
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7. Subject to the indemnification of Frontier by Esenjay contained in
Section 15.02 of the Acquisition Agreement, Frontier hereby indemnifies and
agrees to defend and hold Esenjay harmless from and against any and all loss,
damage, liability, cost and expense, including reasonable attorneys' fees,
suffered or incurred by Esenjay after the date hereof and arising out of any
claims, liabilities, obligations, damages and expenses with respect to the
Assumed Liabilities.
8. Esenjay and Frontier, by their execution hereof, each hereby
acknowledges and agrees that, except as expressly provided herein, neither
the representations and warranties nor the rights and remedies of either
party under the Acquisition Agreement shall be deemed to be enlarged,
modified or altered in any way by this Agreement. This Agreement is solely
for the benefit of Frontier and Esenjay and nothing contained herein shall be
construed to grant any third party any rights against Frontier or Esenjay.
9. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas (without regard to its conflicts of law
doctrine).
IN WITNESS WHEREOF, Frontier has caused this Agreement to be duly
executed by its authorized officers as of the date first above written.
FRONTIER:
Frontier Natural Gas Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, President
ESENJAY:
Esenjay Petroleum Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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