Contract
THIS ASSIGNMENT AND ASSUMPTION
AGREEMENT (this “Agreement”),
executed on March 13, 2009, to be effective as of 12:01 a.m. (Central Time) on
April 15, 2009 (the “Effective
Time”), is entered into by and among Lariat Services, Inc., a Texas
corporation (“LARIAT”),
and Xxxxxxx Xxxxxxxx Energy, Inc., a Delaware corporation (“CWEI”). The
parties to this Agreement are collectively referred to herein as the “Parties,”
or individually as a “Party.”
RECITALS
WHEREAS,
each of LARIAT and CWEI holds a 49.5% limited partnership interest (the “LP
Interest”) in Larclay, L.P., a Texas limited partnership (“LARCLAY”);
WHEREAS,
each of LARIAT and CWEI holds a 50% membership interest (the “LLC
Interest” and, together with the LP Interest, the “Interests”)
in Larclay GP, LLC, a Texas limited liability company (“GP”);
WHEREAS,
pursuant to loans made by LARIAT to LARCLAY, there are (a) a Promissory Note,
dated March 31, 2008, in the principal amount of $2,500,000 payable by LARCLAY
to LARIAT (the “March
2008 Note”) and (b) a Revolving Promissory Note, dated June 10, 2008, in
the principal amount of $5,000,000 payable by LARCLAY to LARIAT (together with
the March 2008 Note, the “Notes”);
WHEREAS,
in connection with LARCLAY’s ownership and operation of its fleet of drilling
rigs, LARIAT is a party to (a) Operating Agreement for Drilling Rigs dated April
20, 2006, between LARCLAY and LARIAT (the “Operating
Agreement”) and (b) Consent and Agreement dated April 21, 2006, among
LARCLAY, CWEI, LARIAT and Xxxxxxx Xxxxx Capital (collectively with the Operating
Agreement, the “Ancillary
Agreements”);
WHEREAS,
LARIAT desires to transfer to CWEI, and CWEI desires to accept from LARIAT, the
Interests, the Notes and the Ancillary Agreements; and
WHEREAS,
the Agreement of Limited Partnership of LARCLAY and the Limited Liability
Company Agreement of GP will be amended to the extent necessary to reflect the
applicable matters set forth above and as contained in this
Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
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ARTICLE 1
ASSIGNMENT
AND ASSUMPTION
Section 1.1 Assignment
of Interests, Notes and Ancillary Agreements. Effective as of
the Effective Time, LARIAT hereby assigns, transfers, sets over and delivers
to
CWEI all
of LARIAT’s right, title and interest in and to the Interests, the Notes and the
Ancillary Agreements, and CWEI hereby accepts LARIAT’s right, title and interest
in and to the Interests, the Notes and the Ancillary Agreements, provided,
however, that LARIAT shall retain the right to all amounts owed by LARCLAY to
LARIAT under the Operating Agreement as of the Effective Time.
Section 1.2 Assumption
of Obligations and Liabilities and Operatorship. CWEI hereby
assumes and agrees to timely and fully perform and discharge all duties,
obligations and liabilities arising from or related to and whether arising or
attributable to periods at, before or after the Effective Time: (a) being
Operator under the Operating Agreement, (b) operations of drilling rigs and
other services performed for LARCLAY or its affiliates, (c) the Ancillary
Agreements, (d) LARIAT’s ownership of the Interests and the Notes and (e) the
transactions hereunder or contemplated hereby (collectively, the “Assumed
Obligations”).
Section 1.3 Waiver of
Claims. Except as otherwise expressly provided in this
Agreement, CWEI hereby expressly disclaims and waives any and all claims it may
have against LARIAT in connection with the Assumed Obligations. Except as
otherwise expressly provided in this Agreement and except for accounts payable
to LARIAT for ordinary course of business services, LARIAT hereby expressly
disclaims and waives any and all claims it may have against CWEI in connection
with LARIAT’s ownership of the Interests, the Operating Agreement and the
Ancillary Agreements.
Section 1.4 Transfer
of Equipment. To the extent that, pursuant to the Operating
Agreement, equipment owned by LARCLAY is in the possession of LARIAT as of the
Effective Time, CWEI will, at its own expense, retrieve such equipment from
LARIAT no later than May 31, 2009. Notwithstanding that equipment
owned by LARCLAY may be in the possession of LARIAT on or after the Effective
Time, LARIAT shall not be required to maintain insurance coverage for such
equipment after the Effective Time. CWEI shall reimburse LARIAT for
all storage costs incurred by LARIAT until the time such equipment is retrieved
by CWEI.
ARTICLE 2
REPRESENTATIONS AND
WARRANTIES
Section 2.1 Representations
and Warranties of LARIAT. LARIAT represents and
warrants to CWEI as follows:
(a) Organization,
Good Standing and Authority. LARIAT is a corporation
duly formed, validly existing and in good standing under the laws of the State
of Texas. The execution and delivery of this Agreement and the
consummation by LARIAT of the transactions contemplated herein have been duly
and validly authorized by all necessary corporate action by
LARIAT. This Agreement has been duly executed and delivered by
LARIAT. LARIAT has all
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requisite
corporate power and authority to enter into and perform this Agreement, to
perform its obligations hereunder and to carry out the transactions contemplated
herein.
(b) Enforceability. This Agreement
constitutes a valid and binding obligation of LARIAT, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors’ rights generally and general principles of equity.
(c) Title. Except
as contemplated by this Agreement, LARIAT has not taken any action to sell or
encumber the Interests.
Section 2.2 Representations
and Warranties of CWEI. CWEI represents and warrants
to LARIAT as follows:
(a) Organization,
Good Standing and Authority. CWEI is a
corporation duly formed, validly existing and in good standing under the laws of
the State of Delaware. The execution and delivery of this Agreement
and the consummation by CWEI of the transactions contemplated herein have been
duly and validly authorized by all necessary corporate action by
CWEI. This Agreement has been duly executed and delivered by
CWEI. CWEI has all requisite corporate power and authority to enter
into and perform this Agreement, to perform its obligations hereunder and to
carry out the transactions contemplated herein.
(b) Enforceability. This Agreement
constitutes a valid and binding obligation of CWEI, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally and general principles of equity.
Section 2.3 Survival. All
representations, warranties, covenants and indemnities made by the Parties in
this Agreement or pursuant hereto shall survive the consummation of the
transactions contemplated hereby.
Section 2.4 Disclaimer
of Representations and Warranties
(a) THE
PARTIES ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE,
AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN,
PAST OR PRESENT, OTHER THAN THOSE INCLUDED IN THIS AGREEMENT. THE
PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE
CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, THAT MAY
ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS
SET FORTH IN THIS AGREEMENT OR ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION WITH THIS AGREEMENT.
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(b) Each
of the Parties agrees that the disclaimers contained in this Section 2.4 are
“conspicuous” disclaimers. Any covenants implied by statute or law by
the use of the words “grant,” “convey,” “bargain,” “sell,” “assign,” “transfer,”
“deliver,” or “set over” or any of them or any other words used in this
Agreement or any exhibits hereto are hereby expressly disclaimed, waived or
negated.
ARTICLE
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INDEMNIFICATION
Section 3.1 Indemnification
by LARIAT. LARIAT shall defend, indemnify and hold
harmless CWEI and its affiliates, and all of its and their directors, officers,
employees, contractors, agents, and representatives (the “CWEI
Indemnitees”) from and against any and all Losses asserted against,
resulting from, imposed upon or incurred by any of the CWEI Indemnitees as a
result of or arising out of the breach of any of the representations or
warranties under Section 2.1 of this Agreement or any breach by LARIAT of any of
its covenants in this Agreement. “Loss”
or “Losses”
shall mean any and all damages, demands, payments, obligations, penalties,
assessments, disbursements, claims, costs, liabilities, losses, causes of
action, and expenses, including interest, awards, judgments, settlements, fines,
fees, costs of defense and reasonable attorneys’ fees, costs of accountants,
expert witnesses and other professional advisors and costs of investigation and
preparation of any kind or nature whatsoever.
Section 3.2 Indemnification
by CWEI. CWEI shall defend, indemnify and hold harmless
LARIAT and its affiliates, and all of its and their directors, officers,
employees, contractors, agents, and representatives (the “LARIAT
Indemnitees”) from and against any and all Losses asserted against,
resulting from, imposed upon or incurred by any of the LARIAT Indemnitees as a
result of or arising out of:
(a) the
breach of any of the representations or warranties under Section 2.2 of this
Agreement or any breach by CWEI of any of its covenants in this
Agreement;
(b) the
Assumed Obligations; and
(c) that
certain Term Loan and Security Agreement dated as of April 21, 2006, among
LARCLAY, as “Borrower,” each of the lenders that is a signatory thereto or which
becomes a signatory thereto (the “Lenders”),
and Xxxxxxx Xxxxx Capital, a division of Xxxxxxx Xxxxx Business Financial
Services, Inc., as agent for the Lenders.
Section 3.3 Indemnification
Procedures.
(a) Any
claim for indemnity under this Agreement shall be in writing and specify in
reasonable detail the specific nature of the claim for indemnification hereunder
(“Claim
Notice”). Any such claim that is described in a Claim Notice
shall survive with respect to the specific matter described
therein. Any person claiming indemnification hereunder is referred to
herein as the “Indemnified
Party” and any person against whom such claims are asserted hereunder is
referred to herein as the “Indemnifying
Party.”
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(b) If
any claim, demand, demand letter, notice of noncompliance or violation, action,
suit, investigation, review, or other judicial or administrative proceeding
(each, a “Claim”)
is asserted or instituted against, or any Loss is sought to be collected from,
an Indemnified Party, the Indemnified Party shall with reasonable promptness
provide to the Indemnifying Party a Claim Notice. The failure to give
any such Claim Notice shall not otherwise affect the rights of the Indemnified
Party to indemnification hereunder unless the
Indemnified Party has proceeded to contest, defend or settle such Claim or
remedy such a Loss with respect to which it has failed to give a Claim
Notice to the Indemnifying Party, but only to the extent the Indemnifying Party
is prejudiced thereby. Additionally, to the extent the Indemnifying
Party is prejudiced thereby, the failure to provide a Claim Notice to the
Indemnifying Party shall relieve the Indemnifying Party from liability for such
Claims and Losses that it may have to the Indemnified Party, but only to the
extent the liability for such Claims or Losses is directly attributable to such
failure to provide the Claim Notice.
(c) The
Indemnifying Party shall have thirty (30) days from the personal delivery or
receipt of the Claim Notice (the “Notice
Period”) to notify the Indemnified Party (i) whether or not it disputes
the liability to the Indemnified Party hereunder with respect to the Claim or
Loss, (ii) in the case where Losses are asserted against or sought to be
collected from an Indemnifying Party by the Indemnified Party, whether or not
the Indemnifying Party shall at its own sole cost and expense remedy such Losses
or (iii) in the case where Claims are asserted against or sought to be collected
from an Indemnified Party, whether or not the Indemnifying Party shall at its
own sole cost and expense defend the Indemnified Party against such Claim;
provided however, that any Indemnified Party is hereby authorized prior to and
during the Notice Period to file any motion, answer or other pleading that it
shall deem necessary or appropriate to protect its interests or those of the
Indemnifying Party (and of which it shall have given notice and opportunity to
comment to the Indemnifying Party) and not prejudicial to the Indemnifying
Party.
(d) If
the Indemnifying Party does not give notice to the Indemnified Party of its
election to contest and defend any such Claim described in Section 3.3(c)(iii)
within the Notice Period, then the Indemnifying Party shall be bound by the
result obtained with respect thereto by the Indemnified Party and shall be
responsible for all costs incurred in connection therewith.
(e) If
the Indemnifying Party is obligated to defend and indemnify the Indemnified
Party, and the Parties have a conflict of interest with respect to any such
Claim, then the Indemnified Party may, in its sole discretion, separately and
independently contest and defend such Claim, and the Indemnifying Party shall be
bound by the result obtained with respect thereto by the Indemnified Party and
shall be responsible for all costs incurred in connection
therewith.
(f) If
the Indemnifying Party notifies the Indemnified Party within the Notice Period
that it shall defend the Indemnified Party against a Claim, the Indemnifying
Party shall have the right to defend all appropriate proceedings, and with
counsel of its own choosing (but reasonably satisfactory to the Indemnified
Party) and such proceedings shall be promptly settled (subject to obtaining a
full and complete release of all Indemnified Parties) or prosecuted by it to a
final conclusion. If the Indemnified Party desires to participate in,
but not control, any such
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defense
or settlement it may do so at its sole cost and expense. If the
Indemnified Party joins in any such Claim, the Indemnifying Party shall have
full authority to determine all action to be taken with respect thereto, as long
as such action could not create a liability to any of the Indemnified Parties,
in which case, such action would require the prior written consent of any
Indemnified Party so affected.
(g) If
requested by the Indemnifying Party, the Indemnified Party agrees to cooperate
with the Indemnifying Party and its counsel in contesting any Claim and in
making any counterclaim against the person asserting the Claim, or any
cross-complaint against any person as long as such cooperation, counterclaim or
cross-complaint could not create a liability to any of the Indemnified
Parties.
Section 3.4
Exclusive
Remedy. AS BETWEEN LARIAT AND CWEI, (A) THE EXPRESS
INDEMNIFICATION PROVISIONS SET FORTH IN THIS AGREEMENT, WILL BE THE SOLE AND
EXCLUSIVE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES WITH RESPECT TO THIS
AGREEMENT AND THE EVENTS GIVING RISE THERETO, AND THE TRANSACTIONS PROVIDED FOR
THEREIN OR CONTEMPLATED THEREBY AND (B) NEITHER PARTY NOR ANY OF ITS RESPECTIVE
SUCCESSORS OR ASSIGNS SHALL HAVE ANY RIGHTS AGAINST THE OTHER PARTY OR ITS
AFFILIATES WITH RESPECT TO THE TRANSACTIONS PROVIDED FOR HEREIN OTHER THAN AS IS
EXPRESSLY PROVIDED IN THIS AGREEMENT.
ARTICLE 4
MISCELLANEOUS
Section 4.1 Expenses. Unless
otherwise specifically provided for herein, each Party will bear its own costs
and expenses (including legal fees and expenses) incurred in connection with the
negotiation of this Agreement and the transactions contemplated
hereby.
Section 4.2 Further
Assurances. From time to time after the Effective Time, and
without any further consideration, each of the Parties shall execute,
acknowledge and deliver all such additional instruments, notices and other
documents, and will do all such other acts and things, all in accordance with
applicable law, as may be necessary or appropriate to more fully and effectively
carry out the purposes and intent of this Agreement.
Section 4.3 Headings;
References; Interpretation. All Article and Section headings
in this Agreement are for convenience only and shall not be deemed to control or
affect the meaning or construction of any of the provisions
hereof. The words “hereof,” “herein” and “hereunder” and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. All
references herein to Articles and Sections shall, unless the context requires a
different construction, be deemed to be references to the Articles and Sections
of this Agreement. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders, and the singular shall include the plural and vice
versa. The use herein of the word “including” following any general
statement, term or matter shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately
following
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such word
or to similar items or matters, whether or not non-limiting language (such as
“without limitation”, “but not limited to”, or words of similar import) is used
with reference thereto, but rather shall be deemed to refer to all other items
or matters that could reasonably fall within the broadest possible scope of such
general statement, term or matter.
Section 4.4 Successors
and Assigns. The Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and
assigns.
Section 4.5 No Third
Party Rights. The provisions of this Agreement are intended to
bind the Parties as to each other and are not intended to and do not create
rights in any other person or confer upon any other person any benefits, rights
or remedies and no person is or is intended to be a third party beneficiary of
any of the provisions of this Agreement.
Section 4.6 Counterparts. This
Agreement may be executed in any number of counterparts, all of which together
shall constitute one agreement binding on the parties hereto.
Section 4.7 Governing
Law; Venue; Jury Trial; and Attorneys’ Fees. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Texas applicable to contracts made and to be performed wholly within such state
without giving effect to conflict of law principles
thereof. The Parties hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of
Texas and of the United States District Courts in each case located in Dallas
County, Texas, for any lawsuits, actions or other proceedings arising out of or
relating to this Agreement and agrees not to commence any such lawsuit, action
or other proceeding except in such courts. Each Party hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any lawsuit, action or other proceeding arising out of or relating to this
Agreement in the courts of the State of Texas or the United States District
Courts in each case located in Dallas County, Texas, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Any right to trial
by jury with respect to any lawsuit, claim or other proceeding arising out of or
relating to this Agreement is expressly and irrevocably waived. The
Party that substantially prevails on the merits of any action related to this
Agreement shall be awarded all of its costs and attorneys’ fees incurred in
connection therewith, including those incurred during the investigation,
discovery, litigation and appeals thereof.
Section 4.8 Severability. If
any of the provisions of this Agreement are held by any court of competent
jurisdiction to contravene, or to be invalid under, the laws of any political
body having jurisdiction over the subject matter hereof, such contravention or
invalidity shall not invalidate the entire Agreement. Instead, this
Agreement shall be construed as if it did not contain the particular provision
or provisions held to be invalid and an equitable adjustment shall be made and
necessary provision added so as to give effect to the intention of the Parties
as expressed in this Agreement at the time of execution of this
Agreement.
Section 4.9 Amendment
or Modification. This Agreement may be amended or modified
from time to time only by the written agreement of all the
Parties. Each such
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instrument
shall be reduced to writing and shall be designated on its face as an amendment
to this Agreement.
Section 4.10 Integration. This
Agreement and the instruments referenced herein supersede all previous
understandings or agreements among the Parties, whether oral or written,
with respect to their subject matter. This document and such
instruments contain the entire understanding of the Parties with respect to the
subject matter hereof and thereof. No understanding, representation,
promise or agreement, whether oral or written, is intended to be or shall be
included in or form part of this Agreement unless it is contained in a written
amendment hereto executed by the Parties after the date of this
Agreement.
Section 4.11 Deed;
Xxxx of Sale; Assignment. To the extent required and permitted by
applicable law, this Agreement shall also constitute a “deed,” “xxxx of sale” or
“assignment” of the assets and interests referenced herein.
Section 4.12 Notices. All
notices, requests, demands, claims and other communications hereunder will be in
writing. Any notice, request, demand, claim, or other communication
hereunder will be deemed duly given if (and then two business days after) it is
sent by registered or certified mail, return receipt requested, postage prepaid,
and addressed to the intended recipient as set forth below:
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If
to LARIAT:
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000
Xxxxxx X. Xxxx Xxxxxx
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Xxxxxxxx
Xxxx, Xxxxxxxx 00000
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Attn: Xxxxxxx
X. Xxxxxx
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Fax: 000-000-0000
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If
to CWEI:
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0
Xxxxx Xxxxx, Xxxxx 0000
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Xxxxxxx,
Xxxxx 00000
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Attn:
Xxxx Xxxxxx
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Fax:
000-000-0000
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Any Party
may give notice, request, demand, claim, or other communication hereunder using
any other means, but no such notice, request, demand, claim, or other
communication will be deemed
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to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other Party notice in the manner herein set forth.
Section
4.12. Resignation
of Managers. LARIAT agrees LARIAT will facilitate the
resignation of Xxxx X. Xxx Xxxxx and Xxxxxxx X. Xxxxxx as Managers of Larclay
GP, LLC effective April 15, 2009.
Section
4.13.
Books,
Records. LARIAT agrees that for a period of 120 days it will
(a) make available for pickup by CWEI, at CWEI’s cost, all books, records,
certificates of title and any and all other documents associated with the
management and operation of LARCLAY and LLC and (b) it will facilitate, upon
written request by CWEI, the review and copying by CWEI of any and all records
relating to the operation of LARCLAY which are in the possession
of affiliates of LARIAT during normal business hours, provided, however, that
LARIAT may keep copies of any and all such records.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of the
date first above written.
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LARIAT
SERVICES, INC.
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By: /s/
Xxx X. Xxxx
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Name: Xxx
X. Xxxx
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Title: Chief
Executive Officer
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Xxxxxxx
Xxxxxxxx Energy, Inc.
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By: /s/ L.
Xxxx Xxxxxx
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Name: L.
Xxxx Xxxxxx
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Title: Executive
Vice President and Chief Operating
Officer
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