Exhibit 10.3
ASSUMPTION AND INDEMNIFICATION AGREEMENT
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This Assumption and Indemnification Agreement ("Agreement") is entered into
as of May 23, 2006, by and among Tradestar Services, Inc., a Nevada corporation
("Tradestar"), Tradestar Acquisition Sub, L.L.C., a Nevada limited liability
company ("Buyer"), The Cymri Corporation, a Texas corporation (the "Maker"), and
Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxxxx, Xx. (collectively,
the "Guarantors").
RECITALS
A. Under the terms of that certain Stock Purchase Agreement, dated
effective as of June 1, 2004, among Xxx X. Xxxxxxx and Xxxxx Xxxx Xxxxxxx,
C.F. ("Skip") Xxxxxxx, III, and Xxxxx X. Xxxxxxx, and The Xxxxx and Xxxxx
Xxxxxxxx, Xx. Trust (individually called "Payee" and collectively as
"Payees") and the Maker (the "Stock Purchase Agreement"), the Maker
acquired all of the issued and outstanding capital stock of Petroleum
Engineers, Inc., a Louisiana corporation ("PEI"), Triumph Energy, Inc., a
Louisiana corporation ("Triumph"), and Petroleum Engineers International,
Inc., a Louisiana corporation ("PEI Int'l" and together with PEI and
Triumph, the "Company Subsidiaries"), (the "Stock Sale").
B. Pursuant to the Stock Purchase Agreement and as part of the
consideration for the Stock Sale, the Maker executed and delivered the
following promissory notes (collectively, the "Promissory Notes") and the
Guarantors and the Company Subsidiaries guaranteed the obligations of the
Maker under the Promissory Notes:
1. Promissory Note, dated December 3, 2004, payable by the Maker
to Xxx X. Xxxxxxx and Xxxxx Xxxx Xxxxxxx;
2. Promissory Note, dated December 3, 2004, payable by the Maker
to The Xxxxx and Xxxxx Xxxxxxxx, Xx. Trust; and
3. Promissory Note, dated December 3, 2004, payable by the Maker
to C.F. ("Skip") Xxxxxxx, III and Xxxxx X. Xxxxxxx.
C. Under the terms of that certain Agreement and Plan of Merger, dated
of even date herewith (the "Merger Agreement"), by and among Tradestar,
Buyer, the Maker, and the Guarantors and Xxxxxxx X. Xxxxxxx, the Maker will
merge with and into Buyer (the "Merger"), and following the Merger, the
separate corporate existence of the Maker shall cease, and immediately
after the effective date of the Merger, Buyer will change its name to
"CYMRI, L.L.C."
D. As part of the consideration for the Merger, the execution of the
Merger Agreement and the consummation of the transactions contemplated
thereby, Tradestar and Buyer have agreed to assume and pay any and all
obligations owing under the Promissory Notes and to pay and perform any
obligations and covenants under any documents securing the payment of the
Promissory Notes, and to indemnify the Guarantors from any and all
liability and obligations under or related to the Promissory Notes and any
documents securing the payment thereof:
AGREEMENT
NOW, THEREFORE, in consideration of the promises contained herein and
referenced above and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties agree as follows:
1. Tradestar and Buyer do hereby unconditionally and irrevocably, jointly
and severally, assume and agree to timely pay any and all amounts due, or to
become due, on the Promissory Notes (including all principal and interest due
thereon) directly to the respective payees or other holders of the Promissory
Notes, and each of them, to the same extent and to the same effect as if
Tradestar and Buyer were the original makers and obligors of the Promissory
Notes.
2. Tradestar and Buyer do hereby unconditionally and irrevocably, jointly
and severally, assume and agree to pay and perform all obligations and covenants
under any documents securing the payment of the Promissory Notes.
3. Tradestar and Buyer do hereby unconditionally and irrevocably, jointly
and severally, agree to indemnify and save and hold the Guarantors, and each of
them, harmless from and against any and all claims, demands, disputes,
liabilities, judgments, causes of action, or damages whatsoever asserted by the
payees, any other holders or assignees of the Promissory Notes, or any other
person, asserted or threatened against the Guarantors, or any of them, for
payment of all or any portion of the obligation evidenced by the Promissory
Notes, and any other obligation and covenants arising under any of the documents
securing the payment of the Promissory Notes (including reasonable attorneys'
fees and court costs) and all amounts paid in settlement, compromise or
satisfaction thereof, that the Guarantors, or any of them, may pay, incur or
otherwise suffer as a consequence of the failure, refusal or inability of
Tradestar or Buyer to pay and perform the obligations assumed and agreed to be
paid and performed pursuant to this Agreement.
4. Tradestar and Buyer do hereby unconditionally and irrevocably, jointly
and severally, agree to pay all reasonable attorneys' fees and court costs and
expenses incurred by the Guarantors, or any of them, in enforcing this
Agreement.
5. This full and complete Agreement to pay and indemnify shall be binding
upon Tradestar and Buyer and their respective successors and assigns and shall
inure to the benefit of the Guarantors and each of them, and their respective
heirs, personal representatives and assigns.
6. This Agreement is to be construed, interpreted and enforceable under the
laws of the State of Texas. Neither this Agreement nor any provision hereof may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
7. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, and together which shall constitute one and the
same instrument. This Agreement constitutes and includes that entire agreement
of the parties with reference to the subject matter hereof and supersedes all
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prior agreements and understandings relating to the subject matter hereof. No
promise or representation of any kind has been made to any of the parties to
this Agreement by any other party or parties to this Agreement or anyone acting
for any of such parties, except as is expressly stated in this Agreement.
8. Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be resolved by binding arbitration administered by
the American Arbitration Association under its Commercial Arbitration Rules in
effect on the date of this Agreement (herein the "AAA Rules"), and judgment on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall be selected pursuant to the AAA Rules
and shall be a neutral and impartial lawyer with excellent academic and
professional credentials (i) who is or has been practicing law for at least
fifteen (15) years, specializing in general commercial litigation or general
corporate and commercial matters and (ii) who has both training and experience
as an arbitrator and is generally available to serve as an arbitrator. The
arbitration shall be governed by the arbitration law of the Federal Arbitration
Act and shall be held in Houston, Texas.
9. All notices and other communications under this Agreement shall be in
writing and either (a) delivered against a receipt therefor; (b) mailed by
registered or certified mail, return receipt requested, postage prepaid, or (c)
sent by telegram or telecopy, in each case addressed as follows:
(a) if to Tradestar or Buyer to:
Tradestar Services, Inc.
CYMRI, L.L.C.
0000 Xxxxxxxxxx XX
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx and Xxxxx, LLP
One Houston Center
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
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(b) if to Guarantors to:
Xxxxx X. Xxxxxx
000 Xxxxx Xxxx Xxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Xxxxxxxx X. Xxxxxxxx, Xx.
0000 Xxx Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Xxxxxx X. Xxxxxx
00000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
with a copy (which shall not constitute notice) to:
Xxxxxx & Westheimer, P.C.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq. and Xxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
[Signature page follows]
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IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement to be effective as of the date hereof.
TRADESTAR SERVICES, INC. TRADESTAR ACQUISITION SUB, L.L.C.
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxx Xxxxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer Vice President
THE CYMRI CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer and
President
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
/s/ Xxxxxxxx X. Xxxxxxxx, Xx.
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XXXXXXXX X. XXXXXXXX, XX.
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