Exhibit 10.1

 

SETTLEMENT AGREEMENT, RELEASE,

AND PURCHASE & SALE AGREEMENT

 

This SETTLEMENT AGREEMENT, RELEASE, AND PURCHASE & SALE AGREEMENT (the
“Agreement”) is entered into and effective this 26th day August 2010, by,
between, and among: (1)(A)  GLOBAL RIG COMPANY ASA, a corporation organized
under the laws of Norway; (B)  GLOBAL RIG ACTIVE 2 AS, a corporation organized
under the laws of Norway, and (C) NORAM DRILLING COMPANY a Texas corporation
(collectively “Global/NorAm”); and (2) WARREN E&P, INC., a New Mexico
corporation, or its designated affiliate (“Warren”).  Global/NorAm and Warren
may be referred to herein individually as a “Party” and collectively as the
“Parties.”

 

RECITALS:

 

REFERENCE is here made for all purposes to: (A) that certain Drilling Bid
Proposal and Daywork Drilling Contract, dated December 6, 2007, between Warren
and Voorhees Thomas LLC (“Voorhees”); and (B) that certain Drilling Bid Proposal
and Daywork Drilling Contract, dated July 2, 2008, between Warren and NorAm
(collectively the “Drilling Contracts”).

 

REFERENCE is also here made to that certain Rig Purchase Agreement, dated
July 10, 2008, between Voorhees Rig International, Inc. and Global Rig Company
ASA (the “Rig Purchase Agreement”), which provides for the purchase and sale of
an oil and gas well drilling rig (the “Rig”) more particularly described therein
and in various Exhibits and Schedules attached thereto.  The specifications for,
description of and component parts on the Rig are described in EXHIBIT “A”
attached hereto and certain documentation concerning the Rig is described in
EXHIBIT “B” attached hereto.

 

WHEREAS, various disputes concerning the Rig have arisen between and among
Global/NorAm and Warren under the Drilling Contracts and the Rig Purchase
Agreement.

 

WHEREAS, NorAm filed that certain lawsuit against Warren styled NorAm Drilling
Company v. Warren E&P, Inc., Cause No. 4:09-cv-01070 in the United States
District Court for the Southern District of Texas, Houston Division (the “NorAm
Case”).

 

WHEREAS, Global Rig Company ASA and Global Rig Active 2 AS filed that certain
lawsuit against Warren styled Global Rig Company ASA and Global Rig Active 2 AS
v. Warren E&P, Inc., Cause No. 4:10-Cv-01682 in the United States District Court
for the Southern District of Texas, Houston Division (the “Global Case”).

 

WHEREAS, the Parties have agreed to settle and resolve their disagreements and
dismiss the NorAm Case and the Global Case.

 

WHEREAS, as part of such settlement, Global/NorAm has agreed to sell and Warren
has agreed to purchase the Rig on the terms, conditions, and provisions set
forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises and undertakings
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and agreed, and in accordance with
the terms, conditions, and provisions set forth below, the Parties agree as
follows:

 

ARTICLE I

 

Purchase and Sale of Rig

 

Section 1.01.  Global/NorAm agrees to and shall sell, transfer and convey good
and marketable title to the Rig, as more particularly described in the Rig
Purchase Agreement and Exhibits “A” and “B” attached thereto, together with all
associated fixtures, equipment and personal property, to Warren in return for
payment of the purchase price of $7,000,000.00.

 

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Section 1.02.  Warren will pay one-half ($3,500,000.00) of the purchase price
within five (5) business days after full and complete execution of this
Agreement (the “Closing”), and shall pay the remaining $3,500,000.00 of the
purchase price in fifteen (15) equal monthly payments commencing thirty (30)
days after the date of the initial payment.

 

Section 1.03.  Warren shall take delivery of the Rig in California and shall be
responsible for and pay the costs of mobilization and transportation of the Rig
from its current location in Houston, Texas, to a location in California to be
determined by Warren.

 

Section 1.04.  Warren shall be responsible for and pay the storage or rental
charges for the Rig at its current location commencing on August 1, 2010, in the
amount of $5,000.00 per month, payable to Seatrax, Inc., whose address is 13223
F.M. 529, Houston, Texas 77041.

 

ARTICLE II

 

Dismissal of Cases

 

Section 2.01.  Global/NorAm, on behalf of NorAm Drilling Company, and Warren
will dismiss the NorAm Case with prejudice at the Closing.

 

Section 2.02.  Global/NorAm, on behalf of Global Rig Company ASA and Global Rig
Active 2 AS, will dismiss the Global Case with prejudice at the Closing.

 

ARTICLE III

 

Release and Indemnification

 

Section 3.01.  Global/NorAm hereby releases and discharges, and agrees to
indemnify and hold Warren, including its parent, affiliates, subsidiaries,
officers, directors, employees, and agents, harmless from any and all claims,
causes of action, demands, rights or liabilities for damages in contract, in
tort, under any statute or regulation, and/or derived directly or indirectly
from any statute or claims under federal, state, local or other laws, including
but not limited to, claims for compensatory damages, statutory damages,
extra-contractual damages, exemplary damages, consequential losses or damages,
interest, known or unknown, fixed or contingent, relating in any way to any
agreements, negotiations, or representations (unless otherwise provided for
herein) regarding the Rig, the Rig Purchase Agreement, the Drilling Contracts,
the NorAm Case, and the Global Case.

 

Section 3.02.  Warren hereby releases and discharges, and agrees to indemnify
and hold Global/NorAm, including its parent, affiliates, subsidiaries, officers,
directors, employees, and agents, harmless from any and all claims, causes of
action, demands, rights or liabilities for damages in contract, in tort, under
any statute or regulation, and/or derived directly or indirectly from any
statute or claims under federal, state, local or other laws, including but not
limited to, claims for compensatory damages, statutory damages,
extra-contractual damages, exemplary damages, consequential losses or damages,
interest, known or unknown, fixed or contingent, relating in any way to any
agreements,  negotiations, or representations (unless otherwise provided for
herein) regarding the Rig, the Rig Purchase Agreement, the Drilling Contracts,
the NorAm Case, and the Global Case.

 

ARTICLE IV

 

Title and Representations Concerning the Rig

 

Section 4.01.  Except as provided for herein, Global/NorAm will convey the Rig,
including all associated equipment, fixtures, personal property and
documentation, to Warren in its “as is” and “where is” condition with no
warranties, either express or implied, as to its operation or functionality in
general or its components and equipment in particular.  This provision
notwithstanding, Global/NorAm represents that it owns clear, marketable title to
the Rig and its associated equipment, and that it can and will convey title to
the Rig to Warren free and clear of any liens, security interests, encumbrances,
or third-party claims of any kind.  Such conveyance shall be in a form
substantially similar to the Bill of Sale, Transfer and Assignment attached
hereto as EXHIBIT “C”.

 

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Section 4.02.  Global/NorAm also represents to Warren that during the pendency
of the NorAm Case it: (i) reviewed the documentation and reports regarding the
American Petroleum Institute (“API”) inspection that resulted in the API
certification plate presently mounted on the Rig; (ii) confirmed to its
satisfaction that the mast and substructure on and of the Rig were and are API
certified pursuant to a Category IV inspection; (iii) conducted and/or witnessed
function testing and component testing on the Rig in general and its components
and equipment in particular; and (iv) prior to taking delivery of the Rig in
January of 2010, confirmed to its satisfaction that the Rig in general and each
component and piece of equipment in particular functioned as contemplated by the
Rig Purchase Agreement.  Global/NorAm is presently unaware of: (i) any defect or
condition in, on or of the Rig that would impair or prevent the Rig from
functioning as contemplated by the Rig Purchase Agreement and in accordance with
industry standards; and (ii) any changes made to or modifications of the Rig or
its associated components and equipment after Global/NorAm took delivery of the
Rig in January of 2010 that would impair or prevent the Rig from functioning as
contemplated by the Rig Purchase Agreement and in accordance with industry
standards.

 

Section 4.03.  On or before the Closing, Global/NorAm shall transfer to and
provide Warren with all of the documentation described in EXHIBIT “B” attached
hereto and as described in the Rig Purchase Agreement.

 

ARTICLE V

 

Closing

 

Section 5.01.  Closing of the transactions contemplated by this Agreement shall
take place at a mutually agreeable geographical location on or before five
(5) business days after the date of full and complete execution of this
Agreement, but no later than August 31, 2010 (the “Closing”).

 

Section 5.02.  At the Closing, Global/NorAm shall: (A) execute, acknowledge and
deliver to Warren the Bill of Sale, Transfer and Assignment attached hereto as
EXHIBIT “C”;  (B) deliver originals of all documentation, technical
specifications, manuals, rig books, third party warranties, API certifications,
books, records, materials, third party consents and other personal property
associated with the Rig, including the documentation described in EXHIBIT “B”
attached hereto; (C) deliver to Warren any and all filed and recorded releases
and terminations of liens, security interests and encumbrances on or covering
the Rig, or copies thereof; (D) deliver possession of the Rig to Warren;
(E) prepare, execute and file with the court forms of Joint Dismissals with
prejudice of the NorAm Case and the Global Case; (F) execute and deliver any and
all other documents, instruments or agreements provided for herein or that are
or may be necessary or reasonably required to fully effectuate the intent
hereof.

 

Section 5.03.  At the Closing, Warren shall: (A) pay Global/NorAm one-half (1/2)
of the purchase price, or $3,500,000.00, in immediately available funds or by
wire transfer; (B) provide evidence that the monthly storage rent and fees have
been and are being paid; (C) execute a Promissory Note in the form substantially
similar to the Promissory Note attached hereto as EXHIBIT “D”, including
applicable financing statements and security interests, acknowledging Warren’s
obligation to pay the remaining $3,500,000.00 of the purchase price, without
interest, in fifteen (15) equal monthly installments commencing thirty (30) days
after the date of Closing; (D) take possession of and assume responsibility for
the Rig; and (E) execute and deliver any and all other documents, instruments or
agreements provided for herein or that are or may be necessary or required to
fully effectuate the intent hereof.

 

ARTICLE VI

 

Covenants and Agreements

 

Section 6.01.  Use, Ownership, and Operation of the Rig.  Until the Closing, as
provided above, Global/NorAm: (i) shall use reasonable efforts to maintain the
Rig in a manner consistent with applicable industry standards and its past
practices, (ii) shall, unless otherwise provided for herein, pay all costs,
rental amounts, and expenses attributable to the ownership or operation of the
Rig relating to the period prior to the transfer thereof to Warren,(iii) shall
not, without Warren’s express written consent, make or enter into any
commitments reasonably anticipated to require future capital expenditures by
Warren in excess of $1,000.00 relating to the Rig, or terminate, materially
amend, or extend any contracts affecting the Rig, or enter into or commit to
enter into any new contract or agreement relating to the Rig, or settle,
compromise, or waive any material rights relating to the Rig, (iv)shall

 

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maintain insurance coverage on the Rig in the amounts and of the types presently
in force, (v) shall perform all material obligations as the owner of the Rig
promptly when due, (vi) shall maintain all applicable permits, if any, related
to the Rig, (vii)shall not transfer, sell, hypothecate, encumber, or otherwise
dispose of the Rig, (viii) shall not grant or create any preferential right to
purchase, right of first opportunity, or other transfer restriction or
requirement with respect to the Rig, and (ix) shall maintain the Rig in at least
as good a condition as it was on the date it acquired the Rig, subject to normal
wear, tear and obsolescence.

 

Section 6.02.  Public Announcements.  Prior to the Closing, neither Party shall
make any press release or other public announcement regarding the existence of
this Agreement, the contents hereof or the transactions contemplated hereby. 
Following the Closing, the Parties may make or issue a press please in form and
substance to be mutually agreed upon by the Parties.

 

ARTICLE VII

 

Representations and Warranties of Global/NorAm

 

Global/NorAm represents and warrants to Warren as set forth below, and makes the
same representations and warranties again at the Closing.

 

Section 7.01.  Existence.  Global/NorAm is a corporation duly formed, organized,
validly existing, and in good standing under the laws of the State of Texas or
the country of Norway, as the case may be. Global/NorAm has full legal power,
right, and authority to conduct its business as such is now being conducted.

 

Section 7.02.  Legal Power.  Global/NorAm has the legal power and right to enter
into and perform this Agreement and the transactions contemplated hereby. The
consummation of the transactions contemplated by this Agreement do not and will
not violate, or be in conflict with any provision of Global/NorAm’s formation
documents or other governing documents.

 

Section 7.03.  Execution.  The execution, delivery, and performance of this
Agreement and the transactions contemplated hereby have been and are duly and
validly authorized by all requisite corporate, company, or other action on the
part of Global/NorAm. This Agreement constitutes the legal, valid, and binding
obligation of Global/NorAm enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, or other laws relating to or
affecting the rights of creditors generally, and by general equitable
principles.

 

Section 7.04.  Brokers.  No broker or finder is entitled to any brokerage or
finder’s fee, or to any commission, based in any way on agreements,
arrangements, or understandings made by or on behalf of Global/NorAm or any
affiliate of Global/NorAm for which Warren has, may or will have any liabilities
or obligations (contingent or otherwise).

 

Section 7.05.  Bankruptcy.  There are no bankruptcy, reorganization, or
arrangement proceedings pending, being contemplated by or, to the knowledge of
Global/NorAm, threatened against Global/NorAm.  Global/NorAm is not “insolvent”
as such term is defined under the Federal Bankruptcy Code or any fraudulent
transfer or fraudulent conveyance statute applicable to the transactions
contemplated by this Agreement.

 

Section 7.06.  Suits and Claims.  There is no litigation, lawsuit, or claim that
have been filed by any person or entity or by any administrative agency or
governmental authority in any legal, administrative, or arbitration proceeding
or, to the knowledge of Global/NorAm, threatened against Global/NorAm or the Rig
that would impede Global/NorAm’s ability to consummate the transactions
contemplated herein or would have a material and adverse effect on the Rig.

 

Section 7.07.  Taxes.  During the period of Global/NorAm’s ownership of the Rig
up to and including the Closing, Global/NorAm has caused to be timely filed all
material tax returns relating to the Rig.  Global/NorAm has paid or caused to be
paid all ad valorem, property, documentary, and similar taxes based upon or
measured by its ownership of the Rig.  Global/NorAm has not received written
notice of any pending claim against Global/NorAm from any applicable taxing
authority for assessment of taxes with respect to the Rig.  There are no audits
of

 

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Global/NorAm by any applicable taxing authority with respect to taxes
attributable to the Rig.  There are no tax liens on or with respect to the Rig.

 

Section 7.08.  Contracts.  Global/NorAm is not in breach of any contracts
applicable to the Rig, and all contracts, if any, applicable to the Rig, are in
full force and effect in accordance with their terms.

 

Section 7.09.  Insurance.  Global/NorAm maintains and through the Closing will
maintain the insurance coverage currently in effect on or with respect to the
Rig.

 

Section 7.10.  Personal Property and Equipment.  Subject to the first sentence
of Section 4.01, Global/NorAm is the owner of the Rig and associated equipment
and personal property free and clear of all liens and encumbrances. 
Global/NorAm has not removed any personal property, equipment, or fixtures from
the Rig, unless the same have been replaced with personal property, equipment,
or fixtures of similar grade, quality and utility.

 

Section 7.11.  No Alienation.  Prior to the Closing, Global/NorAm has not
voluntarily or involuntarily sold, assigned, conveyed or transferred or
contracted to sell, assign, convey or transfer any right or title to, or
interest in, the Rig.

 

Section 7.12.  Property Expenses.  Unless otherwise provided for herein,
Global/NorAm has paid and will until the Closing pay all rental amounts and
miscellaneous expenses attributable to the Rig.

 

Section 7.13.  Governmental Permits.  Unless otherwise provided for herein,
Global/NorAm has and will maintain all applicable permits (including, without
limitation, permits, licenses, approval registrations, notifications,
exemptions, and any other authorizations pursuant to applicable law) that are or
may be necessary, appropriate or related to the Rig.

 

Section 7.14.  No Adverse Change.  Subject to the first sentence of
Section 4.01, the Rig has been maintained in the ordinary course of business
consistent with past practices and applicable industry standards, and there has
been no event or series of events that have either individually or in
combination had a material adverse effect on the Rig.

 

Section 7.15.  Representations and Warranties Exclusive.  Subject to the first
sentence of Section 4.01, all representations and warranties contained in this
Agreement are exclusive, and are given in lieu of all other representations and
warranties, express, implied, or statutory.

 

ARTICLE VIII

 

Representations and Warranties of Warren

 

Warren represents and warrants to Global/NorAm as set forth below, and makes the
same representations and warranties again at the Closing.

 

Section 8.01.  Existence.  Warren is a corporation duly formed, organized,
validly existing, and in good standing under the laws of the state of New
Mexico, and has full legal power, right, and authority to carry on its business
in the state of California as such is now being conducted.

 

Section 8.02.  Legal Power.  Warren has the legal power and right to enter into
and perform this Agreement and the transactions contemplated hereby. The
consummation of the transactions contemplated by this Agreement does not and
will not violate, or be in conflict with, any provision of Warren’s formation
documents or other governing documents.

 

Section 8.03.  Execution.  The execution, delivery, and performance of this
Agreement and the transactions contemplated hereby have been and are duly and
validly authorized by all corporate action on the part of Warren. This Agreement
constitutes the legal, valid, and binding obligation of Warren enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency or other laws relating to or affecting the rights of creditors
generally, and by general equitable principles.

 

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Section 8.04.  Brokers.  No broker or finder is entitled to any brokerage or
finder’s fee, or to any commission, based in any way on agreements,
arrangements, or understandings made by or on behalf of Warren or any affiliate
of Warren for which Global/NorAm has or will have any liabilities or obligations
(contingent or otherwise).

 

Section 8.05. Bankruptcy.  There are no bankruptcy, reorganization, or
arrangement proceedings pending, being contemplated by or, to the knowledge of
Warren, threatened against Warren.

 

Section 8.06.  Suits and Claims.  There is no claim by any person or entity or
by any administrative agency or governmental authority and no legal,
administrative, or arbitration proceeding pending or, to Warren’s knowledge,
threatened against Warren that is reasonably likely to have a material effect on
Warren’s ability to consummate the transactions contemplated herein.

 

Section 8.07.  Securities Laws.  Warren is acquiring the Rig for its own account
or that of its affiliates and not with a view to, or for offer of resale in
connection with, a distribution thereof, within the meaning of the Securities
Act of 1933, 15 U.S.C. § 77a et seq., and any other rules, regulations, and laws
pertaining to the distribution of securities. Warren has not sought or
solicited, nor is Warren participating with, investors, partners, or other third
parties in order to fund the purchase price and to close this transaction, and
all funds to be used by Warren in connection with this transaction are Warren’s
own funds.

 

Section 8.08.  No Investment Company.  Warren is not (a) an investment company
or a company controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended, or (b) subject in any respect to the
provisions of that Act.

 

Section 8.09.  Representations and Warranties Exclusive.  All representations
and warranties contained in Article VIII are exclusive, and are given in lieu of
all other representations and warranties, express, implied, or statutory.

 

ARTICLE IX

 

Conditions Precedent to the Obligations of Global/NorAm

 

The obligations of Global/NorAm to consummate the transactions provided for
herein are subject, at the option of Global/NorAm, to the fulfillment on or
prior to the Closing of each of the following conditions:

 

Section 9.01.  Representations.  The representations and warranties of Warren
contained herein shall be true and correct in all material respects at the
Closing as though made on and as of such date.

 

Section 9.02.  Performance.  Warren shall have performed all material
obligations, covenants and agreements contained in this Agreement to be
performed or complied with by it at or prior to the closing.

 

Section 9.03.  Pending Matters.  No suit, action, or other proceeding shall be
pending or threatened that seeks to, or could reasonably result in, a judicial
order, judgment, or decree that would restrain, enjoin, or otherwise prohibit
the consummation of the transactions contemplated by this Agreement.

 

Section 9.04.    Title Transfer.   Legal title to the Rig will transfer from
NorAm to Warren at the Closing, subject to Warren’s full performance of its
obligations under the Promissory Note attached hereto as EXHIBIT “D”, and
applicable financing statements and security interests securing the payment and
performance of such Promissory Note.  Until such payment and performance occurs,
NorAm shall retain its lien on the Rig and each and every other right, at law or
in equity, with respect to the Rig.

 

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ARTICLE X

 

Conditions Precedent to the Obligations of Warren

 

The obligations of Warren to consummate the transactions provided for herein are
subject, at the option of Warren, to the fulfillment at or prior to the Closing
of each of the following conditions:

 

Section 10.01.  Representations.  The representations and warranties of
Global/NorAm contained herein shall be true and correct in all material respects
at the Closing as though made on and as of such date.

 

Section 10.02.  Performance.  Global/NorAm shall have performed all material
obligations, covenants, and agreements contained in this Agreement to be
performed or complied with by it and them at or prior to the Closing.

 

Section 10.03.  Pending Matters.  No suit, action, or other proceeding shall be
pending or threatened that seeks to, or could reasonably result in, a judicial
order, judgment, or decree that would restrain, enjoin, or otherwise prohibit
the consummation of the transactions contemplated by this Agreement.

 

ARTICLE XI

 

Indemnification

 

Section 11.01.  Application of Indemnities.  All indemnities and indemnification
obligations set forth in this Agreement extend to the Parties and their
respective officers, directors, partners, managers, members, shareholders,
agents, contractors, employees, and affiliates of the indemnified Party
(“Representatives”).

 

A.                                    UNLESS THIS AGREEMENT EXPRESSLY PROVIDES
TO THE CONTRARY, THE INDEMNITY, RELEASE, WAIVER AND ASSUMPTION PROVISIONS SET
FORTH HEREIN APPLY, REGARDLESS OF WHETHER THE INDEMNIFIED PARTY (OR ITS
REPRESENTATIVES) CAUSES, IN WHOLE OR PART, AN INDEMNIFIED CLAIM, INCLUDING
INDEMNIFIED CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE OR IN PART, FROM, OUT
OF, OR IN CONNECTION WITH THE SOLE, JOINT, OR CONCURRENT NEGLIGENCE (BUT NOT
SECURITIES FRAUD CLAIMS THAT REQUIRE SCIENTER OR KNOWLEDGE AS ONE ELEMENT OF THE
CAUSE OF ACTION, GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD BY THE
INDEMNIFIED PARTY),  STRICT LIABILITY, OR OTHER LEGAL FAULT OF THE INDEMNIFIED
PARTY OR ANY OF ITS REPRESENTATIVES.

 

B.                                    NEITHER PARTY SHALL BE ENTITLED TO RECOVER
FROM THE OTHER PARTY, AND EACH PARTY RELEASES THE OTHER PARTY FROM AND WAIVES
ANY AND ALL LOSSES, COSTS, EXPENSES, OR DAMAGES ARISING UNDER THIS AGREEMENT OR
IN CONNECTION WITH OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED IN THIS
AGREEMENT FOR ANY AMOUNT IN EXCESS OF THE ACTUAL COMPENSATORY DAMAGES SUFFERED
BY SUCH PARTY. THE PARTIES WAIVE AND RELEASE EACH OTHER FROM ANY RIGHT TO
RECOVER PUNITIVE, SPECIAL, EXEMPLARY, AND CONSEQUENTIAL DAMAGES ARISING IN
CONNECTION WITH OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED IN THIS
AGREEMENT; PROVIDED, HOWEVER, ANY SUCH DAMAGES RECOVERED BY A THIRD PARTY (OTHER
THAN SUBSIDIARIES, AFFILIATES, OR PARENTS OF A PARTY) FOR WHICH A PARTY OWES THE
OTHER PARTY AN INDEMNITY UNDER THIS AGREEMENT SHALL NOT BE WAIVED. THE PARTIES
ACKNOWLEDGE THAT THIS STATEMENT IS CONSPICUOUS.

 

Section 11.02.  Warren’s Indemnity.  Warren shall release, indemnify, defend and
hold Global/NorAm and its Representatives harmless from and against any and all
claims, demands, costs, charges, expenses, fees, causes of action, suits,
proceedings, damages, and attorney fees caused by, resulting from, or
attributable to (a) any inaccuracy

 

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of any representation or warranty of Warren set forth in this Agreement, or
(b) any breach of or failure to perform or satisfy any of the covenants and
obligations of Warren hereunder.

 

Section 11.03.  Global/NorAm’s Indemnity.  Global/NorAm shall release,
indemnify, defend and hold Warren and its Representatives harmless from and
against any and all claims, demands, costs, charges, expenses, fees, causes of
action, suits, proceedings, damages, and attorney fees caused by, resulting
from, or attributable to (a) any inaccuracy of any representation or warranty of
Global/NorAm set forth in this Agreement, subject to the terms hereof; or
(b) any breach of or failure to perform or satisfy any of the covenants and
obligations of Global/NorAm hereunder.

 

ARTICLE XII

 

Resolution of Disputes

 

In the event any dispute or disagreement between the Parties arising out of or
related to this Agreement, the Parties shall, in good faith, attempt to resolve
such dispute amicably.  In the event such discussions and negotiations do not
result in the resolution of the dispute within a period of thirty (30) calendar
days, then all disputes arising out of, in connection with or in any way
relating to this Agreement shall be resolved by final and binding arbitration or
alternative dispute resolution before a single arbitrator.  The arbitration
shall be conducted by and before Judge David Hittner of the United States
District Court for the Southern District of Texas, Houston Division, or before a
federal magistrate judge or other party designated by Judge Hittner, according
to applicable court, dispute resolution or mediation rules designated or adopted
by Judge Hittner.

 

ARTICLE XIII

 

General Provisions

 

Section 13.01.  Further Assurances.  The Parties agree to and shall perform such
acts, take such actions and enter into, execute and perform any and all
additional or supplemental instruments, documents, contracts and agreements that
are or may be necessary, advisable or required to perform and carry out that
transactions contemplated by this Agreement, fully comply with and perform the
terms, conditions, and provisions contained herein, and fully effectuate the
intent hereof.

 

Section 13.02.  Expenses.  Each Party shall be solely responsible for all
expenses, including due diligence expenses, incurred by it in connection with
this transaction, and neither Party shall be entitled to any reimbursement for
any such expenses from the other Party.

 

Section 13.03.  Document Retention.  As used in this Section 13.03, the term
“Documents” means all files, documents, books, records, and other data delivered
to Warren by Global/NorAm pursuant to the provisions of this Agreement (other
than those that Global/NorAm has retained a copy of), including financial, tax
and accounting records; title, specification, warranty, and ownership files;
contracts; engineering design and related files; and books and records related
to the use and ownership of the Rig on or prior to the Closing date. Warren
shall retain and preserve the Documents for a period of no less than five
(5) years following the Closing date (or for such longer period as may be
required by applicable laws of any governmental authority), and shall allow
Global/NorAm or its representatives to inspect the Documents at reasonable times
and upon reasonable notice during regular business hours during such time
period. Global/NorAm shall have the right during such period to make copies of
any of the Documents at its expense.

 

Section 13.04.  Entire Agreement.  This Agreement, including the documents to be
executed and delivered hereunder, and the exhibits, schedules, and appendices
attached hereto, constitute the entire agreement between the Parties pertaining
to the subject matter hereof.  This Agreement supersedes all prior agreements,
understandings, negotiations, and discussions, whether oral or written, of the
Parties pertaining to the subject matter hereof.

 

Section 13.05.  Amendments.  No supplement, amendment, alteration, modification,
or waiver of this Agreement shall be binding unless and until executed in
writing by each of the Parties and specifically referencing this Agreement.

 

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Section 13.06.  Waiver.  No waiver of any provision of this Agreement shall be
deemed to or shall constitute a waiver of any other term, condition or provision
hereof (whether or not similar), and any such waiver shall not constitute a
continuing waiver unless otherwise expressly provided for herein.

 

Section 13.07.  Construction.  The headings, titles, and captions in this
Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.

 

Section 13.08.  No Third Party Beneficiaries.  Nothing in this Agreement shall
provide any benefit to any third party or entitle any third party to any claim,
cause of action, remedy, or right of any kind, and the Parties agree that this
Agreement shall not be construed as a third party beneficiary contract.

 

Section 13.09.  Assignment.  Neither Party may assign this Agreement in whole or
in part or delegate any of its rights or duties hereunder to any individual or
entity without first obtaining the prior written consent of the other Party, and
any assignment made without such consent shall be void.

 

Section 13.10.  Binding Effect/Benefit.  This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective permitted
successors, assignees, and legal representatives.

 

Section 13.11.  Governing Law; Venue.  This Agreement, the other documents
delivered pursuant hereto, and the legal relationship between the Parties shall
be governed by and construed in accordance with the laws of the State of Texas.
Any arbitration proceeding, alternative dispute resolution, proceeding, or
litigation arising out of this Agreement shall be brought before the federal
court sitting in the City of Houston, Harris County, Texas, and the Parties
irrevocably waive any right to a jury trial or to choose or request any other
venue.

 

Section 13.12.  Notices.  Any notice, communication, request, instruction, or
other document required or permitted hereunder shall be given in writing and
delivered in person or sent by U.S. Mail postage prepaid, return receipt
requested, overnight delivery service, electronically, or by facsimile to the
addresses of the Parties set forth below. Any such notice shall be effective and
deemed given only upon receipt.

 

Global/NorAm:

 

Global Rig Company ASA

Global Rig Active 2 AS

NorAm Drilling Company

Attn:  Bruce Seeley

2000 South Dairy Ashford, Suite 465

Houston, Texas 77077

Telephone:  (281) 598-9200

Facsimile:  (281) 598-9220

Email:bas@noramdrilling.com

 

 

 

Warren:

 

Warren E&P, Inc.

100 Oceangate, Suite 950

Long Beach, CA 90802

Attn: Bob Dowell, Drilling Manager

Telephone: 562.590.0909

Facsimile: 562.590.3546

Email: bdowell@warrenresources.com

 

Either Party may, by written notice delivered to the other Party, change its
address for notice purposes hereunder.

 

Section 13.13.  Severability.  If any term, condition or provision of this
Agreement is determined or held to be invalid, illegal, or incapable of being
enforced by any rule of law, court, tribunal or public policy, then all other
terms, conditions and provisions of this Agreement shall nevertheless remain in
full force and effect; such invalid provision shall be deleted herefrom or
reformed to the extent necessary to make the same valid; and the Parties shall
negotiate in good faith to modify this Agreement in order to effect their
original intent as closely as possible in an acceptable manner for purposes of
closing the transactions contemplated hereby.

 

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Section 13.14.  Interpretation.  This Agreement shall be deemed and considered
for all purposes to have been jointly prepared by the Parties, and shall not be
construed against any one Party (nor shall any inference or presumption be made)
on the basis of who drafted this Agreement or any particular provision hereof,
who supplied the form of Agreement, or any other event of the negotiation,
drafting, or execution of this Agreement. Each Party agrees that this Agreement
has been purposefully written and correctly reflects its understanding of the
transaction that it contemplates. In construing this Agreement, the following
principles will apply:

 

A.            A defined term has its defined meaning throughout this Agreement
and each exhibit and schedule attached to this Agreement, regardless of whether
it appears before or after the place where it is defined.

 

B.            If there is any conflict or inconsistency between the provisions
of the main body of this Agreement and the provisions of any exhibit or schedule
attached hereto, the provisions of this Agreement shall take precedence. If
there is any conflict between the provisions of any transaction documents
attached to this Agreement as an exhibit and the provisions of any transaction
documents actually executed by the Parties, the provisions of the executed
transaction documents shall take precedence.

 

C.            Schedules and exhibits referred to herein are hereby incorporated
and made a part of this Agreement for all purposes by such reference.

 

D.            The articles, sections, exhibits, and schedules referenced in this
Agreement refer to the articles, sections, exhibits, and schedules of this
Agreement. The headings and titles in this Agreement are for convenience only
and shall have no significance in interpreting or otherwise affect the meaning
of this Agreement.

 

E.              The plural shall be deemed to include the singular, and vice
versa, and the masculine, feminine and neuter genders shall be deemed to include
the others.

 

Section 13.15.  Time of the Essence.  Time shall be of the essence with respect
to all terms, conditions and provisions set forth in this Agreement, the
transactions contemplated hereby, and the performance by the Parties hereunder.

 

Section 13.16.  Counterpart Execution.  This Agreement may be executed in any
number of counterparts, and each counterpart hereof shall be effective as to the
Parties that execute the same whether or not all of the Parties execute the same
original or counterpart. If counterparts of this Agreement are executed, the
signature pages from various counterparts may be combined into one composite
instrument for all purposes. All counterparts together shall constitute only one
Agreement, but each counterpart shall be considered an original.  In the event
this Agreement is delivered by facsimile transmission or by e-mail delivery,
such signature shall create a valid and binding obligation of the Party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or email signature page were an original
thereof.

 

Global/NorAm:

 

Warren;

 

 

 

GLOBAL RIG COMPANY ASA,

 

WARREN E&P, INC.,

a Norwegian corporation

 

a New Mexico corporation

 

 

 

 

 

 

By:

/s/ JAN SKARA

 

By:

/s/ ELLIS G. VICKERS

JAN SKARA, President

 

ELLIS G. VICKERS,

 

 

Senior Vice President

 

 

 

GLOBAL RIG ACTIVE 2 AS,

 

 

a Norwegian corporation

 

 

 

 

 

 

 

 

By:

/s/ JAN SKARA

 

 

JAN SKARA, President

 

 

 

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NORAM DRILLING COMPANY,

 

 

a Texas corporation

 

 

 

 

 

 

 

 

By:

/s/ BRUCE SEELEY

 

 

BRUCE SEELEY, President

 

 

 

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