Document:

Exhibit 10.17

 

RICHARD A. BOONE

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of the 31st day of May, 2011 (the “Effective Date”), by and between Rhino GP LLC, a Delaware limited liability company (the “Employer”) and Richard A. Boone (“Executive”).

 

Recitals:

 

Executive is currently employed by Employer pursuant to an Employment Agreement dated April 16, 2008 (the “Prior Agreement”).  The Employer is the general partner of Rhino Resource Partners L.P. (the “Partnership”) and seeks to continue the Executive’s employment with the Employer.

 

The Employer and Executive desire to enter into this Agreement in order to amend and restate the terms of Executive’s employment.  Executive desires to enter into this Agreement, and to accept employment by Employer on the terms hereinafter set forth in this Agreement.  This Agreement amends, restates and supercedes the Prior Agreement.

 

Agreement:

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 

1.           Term of Employment.  Unless terminated earlier in accordance with the provisions of Section 7, Executive’s employment under this Agreement shall be effective for a term commencing on the Effective Date and ending on May 31, 2014 (the “Employment Term”).

 

2.           Position and Duties.  As of the Effective Date, Executive shall serve as the Chief Financial Officer of the Employer.  In such positions, Executive shall report directly to the CEO of the Employer except, where appropriate and/or required by the rules of the New York Stock Exchange, Employer’s charter documents and/or other applicable rule or regulation, to the Board of Directors of Employer and/or Employer’s Audit Committee. Executive shall have the customary authority, responsibilities and duties of such position(s), subject to the direction and definition of such authority, responsibilities, and duties from time to time by Employer.  During the Employment Term, Executive will devote all of his business time and efforts to the performance of his duties hereunder.    Executive shall be subject to all of the employment and personnel policies and procedures in effect from time to time and applicable to executive employees of Employer.  Executive’s regular place of employment during the Employment Term shall be at Employer’s executive offices in Lexington, Fayette County, Kentucky, and Executive shall engage in such travel as may be reasonably required in connection with the performance of his duties hereunder.

 

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3.           Base Salary.  The Employer shall pay Executive a base salary (the “Base Salary”) at the initial annual rate of $275,000 per year, which Base salary shall increase by $20,000 on each one year anniversary of the Effective Date of this Agreement, payable in regular installments in accordance with the usual executive payroll practices of Employer.

 

4.           Incentive Compensation.  Executive shall be permitted to participate in any annual or long-term, cash or equity based, incentive plan or other similar arrangements of the Employer, as they may exist from time-to-time, for which Executive is eligible pursuant to the terms of such plan or arrangement, provided that the specific grant to Executive under any such plan or arrangement shall be in Employer’s sole discretion.

 

5.           Discretionary Bonus.  The Employer may consider and approve in its sole discretion an annual performance-based discretionary bonus (“Discretionary Bonus”) for Executive of up to seventy five percent (75%) of Executive’s Base Salary.  The Discretionary Bonus will be calculated on a full calendar year basis for 2011, 2012 and 2013, and on a prorated basis for 2014.  The prorated bonus for 2014 shall be paid on Executive’s last regularly scheduled pay date.

 

6.           Other Benefits.

 

(a)           Retirement Benefits.  During the Employment Term, Executive shall be provided with the opportunity to participate in the Employer’s qualified 401(k) profit sharing plan and non-qualified deferred compensation plan (if any), as they may exist from time to time, in each case, in accordance with the terms of such plans.

 

(b)           Welfare Benefits; Vacation.  During the Employment Term, Executive shall be provided with the opportunity to participate in the Employer’s medical plan and other employee welfare benefits on a comparable basis as such benefits are generally provided by the Employer from time to time to Employer’s other executives, in each case, in accordance with the terms of such plans.  Executive shall be entitled to three (3) weeks of paid vacation each year during the Employment Term.

 

(c)           Indemnification.  Employer shall indemnify and hold harmless Executive from and against any loss, cost, damage, expense, or liability incurred by Executive for any action taken by Executive in the scope of Executive’s employment for the Employer, provided such action (i) is within the scope, duties, and authority of Executive, (ii) is not in willful violation of any law, regulation, or code of conduct adopted by the Employer, and (iii) does not constitute gross negligence or intentional misconduct by Executive.  The obligations of Employer under this Section 6(c) shall survive the termination of this Agreement.

 

(d)           Reimbursement of Business Expenses.  During the Employment Term, all reasonable business expenses incurred by Executive in the performance of his duties hereunder shall be reimbursed by the Employer upon receipt of documentation of such expenses in a form reasonably acceptable to the Employer, and otherwise in accordance with the Employer’s expense reimbursement policies.

 

(e)           Vehicle. Employer shall provide Executive with the use of a vehicle suitable for the intended duties of the Executive.

 

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7.           Termination.  Notwithstanding any other provision of this Agreement:

 

(a)           For Cause by the Employer or Voluntary Resignation by Executive Without Good Reason.  If Executive is terminated by Employer for Cause (as defined in Section 12(d)) or if Executive voluntarily resigns without Good Reason (as defined in Section 12(j)), Executive shall be entitled to receive as soon as reasonably practicable after his date of termination or such earlier time as may be required by applicable statute or regulation: (i) any earned but unpaid Base Salary through the date of termination; (ii) payment in respect of any vacation days accrued but unused through the date of termination; and (iii) reimbursement for all business expenses properly incurred in accordance with Employer’s policy prior to the date of termination and not yet reimbursed by the Employer (the aggregate benefits payable pursuant to clauses (i), (ii), and (iii) hereafter referred to as the “Accrued Obligations”); and except as provided herein Executive shall have no further rights to any compensation (including any Base Salary or bonus, if any) or any other benefits under this Agreement.

 

(b)           Without Cause by the Employer or Voluntary Resignation by Executive for Good Reason.  If Executive is terminated by the Employer other than for Cause, Disability (as defined in Section 12(g)) or death, or if Executive voluntarily resigns for Good Reason, Executive shall receive:  (i) the Accrued Obligations; and (ii) subject to Section 7(f), Base Salary for a period of twelve (12) months from the termination of employment, payable in a lump sum within thirty (30) days of the date of termination.  Except as provided herein, Executive shall have no further rights to any compensation (including any Base Salary or bonus, if any) or any other benefits under this Agreement.

 

(c)           Death.  Following termination of employment for death, Executive’s estate shall be entitled to receive the Accrued Obligations as well a pro-rated annual discretionary bonus as awarded by Employer.  Except as provided herein, Executive’s estate shall have no further rights to any other compensation or any other benefits under this Agreement.

 

(d)           Disability.  Following termination of employment for Disability, Executive shall be entitled to receive the Accrued Obligations.  Except as provided herein, Executive shall have no further rights to any compensation (including any Base Salary) or any other benefits under this Agreement.

 

(e)           Accrued & Vested Benefits.  Upon any termination of Executive’s employment, whether by Executive or Employer, Executive shall be entitled, in addition to any other benefits that may be payable hereunder, to all benefits accrued and vested as of the date of such termination, due to Executive under any plan, policy or practice of Employer (such as, for example, accrued health benefits or reimbursements) (collectively, “Accrued and Vested Benefits”).

 

(f)            Release Etc.  Notwithstanding any other provision of this Agreement to the contrary, Executive acknowledges and agrees that any and all payments to which Executive is entitled under this Section 7 which are described as being subject to this Section 7(f) are conditioned upon and subject to (i) Executive’s execution of an agreement in such reasonable and customary form as shall be prepared by the Employer reaffirming Executive’s obligations under Section 8 hereof, and (ii) Executive’s execution of, and not having revoked within any

 

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applicable revocation period, a general release and waiver, in such reasonable and customary form as shall be prepared by the Employer, of all claims Executive may have against the Employer and its directors, officers, subsidiaries and affiliates, except as to (x) matters covered by provisions of this Agreement that expressly survive the termination of this Agreement or are covered by the grant referred to in Section 9 hereof, and (y) any Accrued and Vested Benefits to which Executive may be entitled.

 

(g)           Resignation.  Upon Executive’s termination of employment for any reason, Executive shall be deemed to have immediately resigned from all offices with the Employer and any of the Employer’s subsidiaries or affiliates and shall, immediately upon the request of the Employer, confirm such resignations in writing.

 

8.           Covenants.

 

(a)           Confidentiality.  Executive agrees that Executive will not at any time during Executive’s employment with the Employer or thereafter, except in performance of Executive’s duties for and obligations to the Employer hereunder, use or disclose, either directly or indirectly, any Confidential Information (as hereinafter defined) of the Employer or its subsidiaries or affiliates that Executive may learn by reason of his association with the Employer.  The term “Confidential Information” shall mean any past, present, or future confidential or sensitive plans, programs, documents, agreements, internal management reports, financial information, or other material relating to the business, strategies, services, or activities of the Employer, including, without limitation, information with respect to the Employer’s operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, including leases, regulatory status, compensation paid to employees, or other terms of employment, and trade secrets, market reports, customer investigations, customer lists, and other similar information that is proprietary information of the Employer or its subsidiaries or affiliates; provided, however, the term “Confidential Information” shall not include any of the above forms of information which has become public knowledge, unless such Confidential Information became public knowledge due to an act or acts by Executive or his representative(s) in violation of this Agreement.  Notwithstanding the foregoing, Executive may disclose such Confidential Information when required to do so by a court of competent jurisdiction, by any governmental agency having supervisory authority over the business of the Employer or its subsidiaries or affiliates, as the case may be, or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order Executive to divulge, disclose or make accessible such information; provided, further, that in the event that Executive is ordered by any such court or other government agency, administrative body, or legislative body to disclose any Confidential Information, Executive shall (i) promptly notify the Employer of such order, (ii) at the reasonable written request of the Employer, diligently contest such order at the sole expense of the Employer as expenses occur or at the election of Employer, cooperate with Employer’s effort to contest such order, and (iii) at the reasonable written request of the Employer, seek to obtain, at the sole expense of the Employer, such confidential treatment as may be available under applicable laws for any information disclosed under such order or at the election of Employer, cooperate with Employer’s effort to obtain such confidential treatment.

 

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(b)           Non-Compete.  During the Employment Term and for one (1) year immediately following a termination of employment for any reason, Executive shall not, without the prior written consent of the Employer, participate or engage in, directly or indirectly (as an owner, partner, employee, officer, director, independent contractor, consultant, advisor or in any other capacity calling for the rendition of services, advice, or acts of management, operation or control) any business for an individual or entity whose principal business involves coal mining or coal marketing in the following regions: Central Appalachia, Northern Appalachia, Illinois Basin, Western Colorado, Utah and any other region in which the Employer or any of the Employer’s subsidiaries conduct business.

 

(c)           Non-Solicitation.  During the Employment Term and for two (2) years immediately following a termination of Employment for any reason, Executive shall not, without the prior written consent of the Employer, solicit or induce any then-existing employee of the Employer or any of its subsidiaries or affiliates to leave employment with the Employer or any of its subsidiaries or affiliates, or contact any then-existing customer or vendor under contract with the Employer or any of its affiliates or subsidiaries for the purpose of obtaining business similar to that engaged in, or received (as appropriate), by the Employer or any of its affiliates or subsidiaries.

 

(d)           Cooperation.  Executive agrees that during the Employment Term or following a termination of employment for any reason, Executive shall, upon reasonable advance notice, assist and cooperate with the Employer with regard to any investigation or litigation related to a matter or project in which Executive was involved during Executive’s employment.  The Employer shall reimburse Executive for all reasonable and necessary expenses related to Executive’s services under this Section 8(d) (i.e., travel, lodging, meals, telephone, overnight courier) within ten (10) business days of Executive submitting to the Employer appropriate receipts and expense statements.

 

(e)           Survivability.  The duties and obligations of Executive pursuant to this Section 8 shall survive the termination of this Agreement and Executive’s termination of employment for any reason.

 

(f)            Remedies.  Executive acknowledges that the protections of the Employer set forth in this Section 8 are fair and reasonable, and that any violation of such protections would cause serious and irreparable harm and damage to the Employer and its subsidiaries and affiliates.  Executive agrees that remedies at law for a breach or threatened breach of the provisions of this Section 8 would be inadequate and, therefore, the Employer shall be entitled, in addition to any other available remedies (including money damages), without posting a bond, to equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction, or any other equitable remedy that may be then available.

 

(g)           Limitation.  The terms of this Section 8 are intended to limit disclosure and competition by the Executive to the maximum extent permitted by law.  If the duration, scope, or nature of any limitation or restriction imposed by any provision of this Section 8 is finally determined by any court or tribunal of competent jurisdiction to be in excess of what is valid and enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is valid and enforceable.  Executive hereby acknowledges that this Section

 

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8 shall be given the construction which renders its provisions valid and enforceable to the maximum extent, not exceeding its express terms, possible under applicable law

 

9.           [Intentionally Omitted]/

 

10.         Representations of Executive.  Executive hereby represents to the Employer that Executive has full lawful right to enter into this Agreement and carry out Executive’s duties hereunder, and that performance of Executive’s obligations hereunder will not constitute a breach of or default under any employment, confidentiality, non-competition or other agreement.  Executive further represents to the Employer that Executive is not listed in the Office of Surface Mining’s Applicant Violator System database.  Executive shall provide prompt notice to the Employer of Executive’s first employment subsequent to a termination of employment.

 

11.         Miscellaneous.

 

(a)           Satisfaction of Obligations Under Prior Agreement.  Employer, Rhino and Executive hereby acknowledge that this Agreement amends, restates and supersedes the Prior Agreement.

 

(b)           [Intentionally Omitted]

 

(c)           Governing Law.  This Agreement will be governed by, and interpreted in accordance with, the laws of the Commonwealth of Kentucky applicable to agreements made and to be wholly performed within the Commonwealth of Kentucky, without regard to the conflict of laws provisions of any jurisdiction which would cause the application of any law other than that of the Commonwealth of Kentucky.  Executive hereby consents to the jurisdiction of the state and federal courts of the Commonwealth of Kentucky, including the Fayette Circuit Court, and hereby waives any objection to venue of any action brought in such courts.

 

(d)           Entire Agreement; Amendments.  This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Employer.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth or referred to herein.  This Agreement may not be altered, modified, or amended, nor may any of its provisions be waived, except by written instrument signed by the parties hereto which states that it is intended to alter, modify or amend this agreement or waive a right hereunder.  Sections 7 and 8 hereof shall survive the termination of Executive’s employment with the Employer, except as otherwise specifically stated therein.

 

(e)           Neutral Interpretation.  This Agreement constitutes the product of the negotiation of the parties hereto and the enforcement of this Agreement shall be interpreted in a neutral manner, and not more strongly for or against any party based upon the source of the draftsmanship of the Agreement.   Each party has been provided ample time and opportunity to review and negotiate the terms of this Agreement and consult with legal counsel regarding the Agreement.

 

(f)            No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive

 

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such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

(g)           Severability.  In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

 

(h)           Successors.

 

(i)            This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

 

(ii)           This Agreement shall inure to the benefit of and be binding upon the Employer and its successors and assigns.  The Employer shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) to all or a substantial portion of its business and/or assets, by agreement in form and substance reasonably satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform this Agreement if no such succession had taken place.  Regardless of whether such an agreement is executed, this Agreement shall be binding upon any successor of the Employer and such successor shall be deemed the “Employer” for purposes of this Agreement.  Notwithstanding anything to the contrary contained herein, the Executive shall have the right to terminate this Agreement if Employer’s assets or membership units are sold to an entity that is not a subsidiary or an affiliate of the Employer.  Such a sale shall include a merger, consolidation, sale of assets or membership units or other corporate reorganization; however it shall not include a change in ownership as a result of a public offering.  Such a termination by Executive shall not be deemed a termination for “Good Reason” as herein defined, under which Executive would be entitled to the severance payment set out in Section 7 (b) (ii) above.

 

(i)            Notice.  For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, if delivered by overnight courier service, if sent by facsimile transmission or if mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses or sent via facsimile to the respective facsimile numbers, as the case may be, as set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt; provided, however, that (i) notices sent by personal delivery or overnight courier shall be deemed given when delivered; (ii) notices sent by facsimile transmission shall be deemed given upon the sender’s receipt of confirmation of complete transmission, and (iii) notices sent by United States registered mail shall be deemed given two days after the date of deposit in the United States mail.

 

If to the Employer, to:

 

Rhino GP LLC

424 Lewis Hargett Circle

 

7

 

Suite 250

Lexington, Kentucky 40503

Attn:  CEO

 

cc:

 

Rhino GP LLC

411 W. Putnam Ave.

Greenwich, CT 06830

Attn:  Arthur Amron

 

If to Executive, to such address as shall most currently appear on the records of the Employer.

 

(j)            Withholding.  The Employer may withhold from any amounts payable under this Agreement such Taxes (as defined in Section 12(k)) as may be required to be withheld pursuant to any applicable law or regulation.

 

(k)           Counterparts.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

(l)            Code Section 409A.  It is intended that any amounts payable under this Agreement and the Employer’s and Executive’s exercise of authority or discretion hereunder shall comply with Code Section 409A (including the Treasury regulations and other published guidance relating thereto) so as not to subject Executive to the payment of any interest or additional tax imposed under Code Section 409A.  To the extent any amount payable under this Agreement would trigger the additional tax imposed by Code Section 409A, the Agreement shall be modified to avoid such additional tax.

 

(m)          Confidential Terms.  Executive agrees to maintain as confidential the terms and conditions of this Agreement, provided however Executive may disclose the terms of this Agreement to his legal counsel, and accountant or tax preparer, or as may be otherwise required by law.

 

(n)           Waiver of Jury Trial.  The parties hereby voluntarily and irrevocably waive the right to a trial by jury with regard to any action arising under or in connection with this agreement or the employment of the Executive by the Employer.

 

12.         Definitions.

 

(a)           Accrued Obligations.  “Accrued Obligations” has the meaning set forth in Section 7(a).

 

(b)           Base Salary.   “Base Salary” has the meaning set forth in Section 3.

 

(c)           Board.  “Board” means the Board of Directors of the Employer.

 

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(d)           Cause.  “Cause” for termination by the Employer of Executive’s employment with the Employer means any of the following:

 

(i)            the failure of Executive to perform substantially his duties (other than any such failure resulting from incapacity due to disability), within ten days after written notice from the Employer;

 

(ii)           Executive’s conviction of, or plea of guilty or no contest to (A) a felony or (B) a misdemeanor involving dishonesty or moral turpitude; or

 

(iii)          Executive engaging in any illegal conduct, gross misconduct, or other material breach of this Agreement which is materially and demonstrably injurious to the business or reputation of the Employer; or

 

(iv)          Executive engaging in any act of dishonesty or fraud involving Employer or any subsidiary or affiliate of Employer.

 

(e)           Code.  “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

(f)            Employer.   “Employer” means Rhino GP LLC, a Delaware limited liability company.

 

(g)           Disability.   “Disability” means the inability of Executive to perform his normal duties as a result of any physical or mental injury or ailment for (i) any consecutive forty five (45) day period or (ii) any ninety (90) days (whether or not consecutive) during any three hundred sixty five (365) calendar day period.

 

(h)           Employment Term.   “Employment Term” has the meaning set forth in Section 1.

 

(i)            Executive.   “Executive” means Richard A. Boone.

 

(j)            Good Reason.  “Good Reason” for termination by Executive of Executive’s employment means the occurrence (without Executive’s express written consent) of any one of the following acts by the Employer or failures by Employer to act:

 

(i)            the assignment to Executive of any duties inconsistent in any material respect with those of the office to which Executive is assigned pursuant to Section 2 hereof (including status, office, title and reporting requirements), or any other diminution in any material respect in such position, authority, duties or responsibilities unless agreed to by Executive;

 

(ii)           a reduction in Base Salary;

 

(iii)          a reduction in Executive’s welfare benefits plans, qualified retirement plan, or paid time off benefit, other than a reduction as a result of a general change in any such plan; or

 

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(iv)          any purported termination of Executive’s employment under this Agreement by the Employer other than for Cause, death or Disability.

 

Prior to Executive’s right to terminate this Agreement, he shall give written notice to the Employer of his intention to terminate his employment on account of Good Reason.  Such notice shall state in detail the particular act or acts of the failure or failures to act that constitute the grounds on which Executive’s Good Reason termination is based and such notice shall be given within six (6) months of the occurrence of the act or acts or the failure or failures to act which constitute the grounds for Good Reason.  The Employer shall have thirty (30) days upon receipt of the notice in which to cure such conduct, to the extent such cure is possible and reasonable.

 

(k)           Taxes.  “Taxes” mean the incremental United States federal, state and local income, excise and other taxes payable by Executive with respect to any applicable item of income.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates written below.

 

 

	
EXECUTIVE:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Richard   A. Boone
    	
 
    
	
 
    	
 
    
	
Date   signed:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
RHINO   GP LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date signed:
    	
 
    	
 
    

 

11Exhibit 10.24

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Assignment and Assumption Agreement, dated as of May 6, 2011 (this “Assignment Agreement”), is by and between Gulfport Energy Corporation, a Delaware corporation (the “Assignor”), and Windsor Ohio LLC, a Delaware limited liability company (“Windsor”) and Rhino Exploration LLC, a Delaware limited liability company (“Rhino”) and, together with Windsor, the “Assignees”).  The Assignor and the Assignees are collectively referred to herein as the “Parties.”

 

Preliminary Statements

 

A.            The Assignor is a party to (i) that certain Purchase Agreement, dated as of February 16, 2011, as amended and modified (the “Purchase Agreement”), by and between Tri-Star Energy Holdings, Inc. (the “Seller”), and the Assignor and (ii) that certain Right of First Refusal Agreement, dated as of February 25, 2011 (the “Right of First Refusal Agreement” and, together with the Purchase Agreement, the “Agreements”), by and between Wishgard, LLC (“Wishgard”), and the Assignor.  Capitalized terms used, but not defined herein, shall have the meanings ascribed to them in the Purchase Agreement.

 

B.            Under the Purchase Agreement, and subject to the terms thereof, the Assignor has agreed to purchase all of the Seller’s right, title and interest in and to certain oil and gas leases in Ohio covering approximately 22,500 acres (collectively, the “Initial Tri-Star Leases”).

 

C.            Under the Purchase Agreement, the Assignor has also agreed to purchase certain additional leases (the “Add-On Tract Leases” and together with the Initial Tri-Star Leases, the “Tri-Star Leases”) on the same terms and conditions as the Initial Tri-Star Leases, provided that the Add-On Tract Leases (i) are acquired within 10 days of the Effective Date of the Purchase Agreement and (ii) satisfy certain other criteria set forth in the Purchase Agreement.

 

D.            Under the Purchase Agreement, the Assignor also has an exclusive right of first refusal for a period of six months from the Effective Date of the Purchase Agreement on any additional tracts leased by the Seller within one mile of the lease boundaries of the Initial Tri-Star Leases (“Tri-Star Right of First Refusal”).

 

E.             Under the Right of First Refusal Agreement, and subject to the terms thereof, the Assignor, for a period of one year from the date of such agreement, is entitled to a right of first refusal (the “Utica Right of First Refusal”) to purchase any interests acquired by or on behalf of Wishgard in the Utica Shale.

 

F.             Under the Purchase Agreement and the Right of First Refusal Agreement, the following elections or determinations are to be made at the discretion or option of the Assignor: (i) the election from time-to-time to exercise the Tri-Star Right of First Refusal; (ii) the determination, under Section 4 of the Purchase Agreement, that a particular Tri-Star Lease lacks Marketable Title; (iii) the determination that the conditions to Closing set forth in Section 5 of the Purchase Agreement have been satisfied; and (iv) the election from time-to-time to exercise the Utica Right of First Refusal (collectively, the “Discretionary Matters”).

 

G.            The Assignor desires to assign to Windsor and Rhino, and Windsor and Rhino desire to acquire from the Assignor, an undivided 39.2% interest and 10.8% interest, respectively

 

 

(the “Proportionate Interest”), in each of the leases acquired by the Assignor under the Agreements (the “Leases”) on the terms set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Assignor and the Assignees, intending to be legally bound, hereby agree as follows:

 

1.             Assignment.  Subject to the terms and conditions of this Assignment Agreement and except as provided in Section 4 of this Assignment Agreement, the Assignor hereby agrees to sell, assign, transfer, convey and deliver to Windsor and Rhino, and each of Windsor and Rhino, severally and not jointly, agrees to purchase for cash and accept the conveyance of, an undivided 39.2% interest and 10.8% interest, respectively, in each of the Leases acquired by the Assignor under the Agreements (the “Assignment”).

 

2.             Assumption.  Subject to the terms and conditions of this Assignment Agreement, each Assignee hereby agrees to accept the Assignment with respect to its Proportionate Interest, and assumes and agrees to observe, perform, pay and/or otherwise discharge an undivided 39.2% and 10.8%, respectively, of the obligations of the Assignor under each of the Agreements and the assigned Leases.

 

3.             Terms of the Assignment.  The Assignment of Leases from the Assignor to the Assignees contemplated herein will occur contemporaneously with the acquisition of such Leases by the Assignor from the Seller and/or Wishgard.  The Assignor shall advise the Assignees in writing of each anticipated acquisition of Leases prior to the proposed closing date, and such notice shall state the total purchase price to be paid on that closing date.  Each Assignee shall deliver its Proportionate Interest of that amount, in immediately available funds, to an account designated by the Assignor, at least one business day prior to the closing date.  Except as expressly set forth in this Assignment Agreement, no Party makes any representation or warranty, express or implied, with respect to the Leases, the Assignment, the Agreements or otherwise.  Notwithstanding any provision of this Assignment Agreement to the contrary, the Assignees shall have no obligation to purchase Leases aggregating more than 20,000 net acres without their prior written consent.

 

4.             Discretionary Matters.  Notwithstanding anything to the contrary contained in this Assignment Agreement, the Assignor shall retain the sole and exclusive right and authority to make any election or determination with respect to each Discretionary Matter and the Assignees shall be bound by such election or determination as if such election or determination had been made by the Assignee. Further, the Assignor agrees that to the extent that the Assignor recovers any damages from the Seller and/or Wishgard for any breach of such party’s representations or warranties contained in the Purchase Agreement and/or the Right of First Refusal Agreement, as applicable, the Assignees shall be entitled to their Proportionate Interest of such damages, net of any costs of recovery or other applicable expenses.

 

5.             Assignment Fee.  Each Assignee hereby agrees to pay the Assignor, at the time of each purchase hereunder, an assignment fee of one percent of its total purchase price for such purchase to reimburse the Assignor for its costs and expenses in pursuing this acquisition.

 

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6.             AMI Agreement.  The Assignor is in the process of preparing an AMI Agreement and a Joint Operating Agreement under which the Assignor will serve as the operator of the Ohio acreage.  These agreements will have similar terms as the Permian and Niobrara agreements between the Assignor and Windsor except, as provided above, the Assignor shall be the operator thereunder.

 

7.             Representations and Warranties of the Assignor.  The Assignor represents and warrants to each Assignee that the statements contained in this Section 7 are accurate and complete on the date of this Assignment Agreement.

 

(a)           The Assignor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.  The Assignor has the requisite entity power and authority necessary to own or lease its properties and to carry on its businesses as currently conducted. There is no pending or threatened action, suit, arbitration, mediation, investigation or similar proceeding (an “Action”) for the dissolution, liquidation, insolvency or rehabilitation of the Assignor.

 

(b)           The Assignor has the relevant corporate power and authority necessary to execute and deliver this Agreement and to perform and consummate the transactions contemplated hereby (the “Transactions”).  The Assignor has taken all action necessary to authorize its execution and delivery of this Assignment Agreement, the performance of its obligations hereunder and its consummation of the Transactions.  This Assignment Agreement has been duly authorized, executed and delivered by the Assignor and is enforceable against the Assignor in accordance with its terms, except as such enforceability may be subject to the effects of bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the rights of creditors and general principles of equity (an “Enforceability Exception”).

 

(c)           The execution and the delivery by the Assignor of this Assignment Agreement, the performance by the Assignor of its obligations hereunder and the Agreements and the consummation of the Transactions by the Assignor will not (a) with or without notice or lapse of time, constitute or create a breach or violation of, or default under, any law, order, contract or permit to which the Assignor is a party or by which it is bound or any provision of the Assignor’s organizational documents, (b) require any consent, approval, notification, waiver or other similar action (a “Consent”) under any contract or organizational document to which the Assignor is a party or by which it is bound or (c) require any permit under any law or order, other than notifications or other filings with state or federal regulatory agencies after the Closing that are necessary or convenient and do not require approval of the agency as a condition to the validity of the Transactions.

 

8.             Representations and Warranties of the Assignees.  Each Assignee represents and warrants to the Assignor, as to itself only, that the statements contained in this Section 8 are accurate and complete on the date of this Assignment Agreement.

 

(a)           The Assignee is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.  The Assignee has the requisite entity power and authority necessary to own or lease its

 

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properties and to carry on its businesses as currently conducted.  There is no pending or threatened Action for the dissolution, liquidation, insolvency or rehabilitation of the Assignee.

 

(b)           The Assignee has the relevant limited liability company power and authority necessary to execute and deliver this Assignment Agreement and to perform and consummate the Transactions. The Assignee has taken all action necessary to authorize its execution and delivery of this Assignment Agreement, the performance of its obligations hereunder and its consummation of the Transactions. This Agreement has been duly authorized, executed and delivered by the Assignee and is enforceable against the Assignee in accordance with its terms, except as such enforceability may be subject to the effects of an Enforceability Exception.

 

(c)           The execution and the delivery by the Assignee of this Assignment Agreement, the performance by the Assignee of its obligations hereunder and the consummation of the Transactions by the Assignee will not (a) with or without notice or lapse of time, constitute or create a breach or violation of, or default under, any law, order, contract or permit to which the Assignee is a party or by which it is bound or any provision of the Assignee’s organizational documents, (b) require any Consent under any contract or organizational document to which the Assignee is a party or by which it is bound or (c) require any permit under any law or order, other than notifications or other filings with state or federal regulatory agencies after the Closing that are necessary or convenient and do not require approval of the agency as a condition to the validity of the Transactions.

 

9.             Entire Agreement.  This Assignment Agreement, together with the Agreements and all schedules, exhibits, annexes or other attachments hereto or thereto, and the certificates, documents, instruments and writings that are delivered pursuant hereto or thereto, constitutes the entire agreement and understanding of the Parties in respect of the subject matter hereof and supersedes all prior understandings, agreements or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

 

10.           Notices.  All notices, requests and other communications provided for or permitted to be given under this Agreement must be in writing and must be given by personal delivery, by certified or registered United States mail (postage prepaid, return receipt requested), by a nationally recognized overnight delivery service for next day delivery, or by facsimile transmission, to the intended recipient at the address set forth for the recipient on the signature page of this Agreement (or to such other address as each Party may give in a notice given in accordance with the provisions hereof). All notices, requests or other communications will be effective and deemed given only as follows: (i) if given by personal delivery, upon such personal delivery, (ii) if sent by certified or registered mail, on the fifth business day after being deposited in the United States mail, (iii) if sent for next day delivery by overnight delivery service, on the date of delivery as confirmed by written confirmation of delivery or (iv) if sent by facsimile, upon the transmitter’s confirmation of receipt of such facsimile transmission, except that if such confirmation is received after 5:00 p.m. (in the recipient’s time zone) on a business day, or is received on a day that is not a business day, then such notice, request or communication will not be deemed effective or given until the next succeeding business day. Notices, requests and other communications sent in any other manner, including by electronic mail, will not be effective.

 

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11.           Specific Performance; Remedies.  Each Party acknowledges and agrees that the other Party would be damaged irreparably if any provision of this Agreement was not performed in accordance with its specific terms or was otherwise breached. Accordingly, the Parties will be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Assignment Agreement and its provisions in any action or proceeding instituted in the federal court sitting in Oklahoma County, Oklahoma having jurisdiction over the Parties and the matter, in addition to any other remedy to which they may be entitled, at law or in equity. Except as expressly provided herein, the rights, obligations and remedies created by this Agreement are cumulative and in addition to any other rights, obligations or remedies otherwise available at law or in equity. Nothing herein will be considered an election of remedies.

 

12.           Further Assurances.  Each Party hereby agrees that it will, at any time and from time to time after the date hereof, and without further consideration, take all such further actions, and execute and deliver all such further instruments or documents, as may be reasonably requested by the other Party to effectuate the purposes of this Assignment Agreement.

 

13.           Expenses.  Each Party will bear its own costs and expenses incurred in connection with the preparation, execution and performance of this Assignment Agreement, including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.

 

14.           Assignment; Binding Effect.  No Party may assign either this Assignment Agreement or any of its rights, interests or obligations hereunder without the prior written approval of each other Party, and any such assignment by a Party without the prior written approval of each other Party will be deemed invalid and not binding on such other Parties. All of the terms, agreements, covenants, representations, warranties and conditions of this Agreement are binding upon, inure to the benefit of and are enforceable by, the Parties and their respective successors and permitted assigns.  For the avoidance of doubt, nothing contained in this Section 14 shall restrict the right of a Party to subsequently transfer its interest in any of the Leases.

 

15.           Third Parties.  The provisions of this Assignment Agreement are for the benefit of the Parties hereto and not for any other person or entity.

 

16.           Amendment; Extensions; Waivers.  No amendment, modification, waiver, replacement, termination or cancellation of any provision of this Assignment Agreement will be valid unless the same is in writing and signed by both Parties and specifically states that it is intended to amend, modify, terminate or cancel this Assignment Agreement or waive a right hereunder.  Each waiver of a right hereunder does not extend beyond the specific event or circumstance giving rise to the right.  No waiver by a Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising because of any prior or subsequent such occurrence.  Neither the failure nor any delay on the part of a Party to exercise any right or remedy under this Assignment Agreement or the Agreements  will operate as a waiver thereof, nor does any single or partial exercise of any right or remedy preclude any other or further exercise of the same or of any other right or remedy.

 

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17.           Severability.  The provisions of this Assignment Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof; provided, however, that if any provision of this Assignment Agreement, as applied to either Party or to any circumstance, is judicially determined not to be enforceable in accordance with its terms, the Parties agree that the court judicially making such determination may modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its modified form, such provision will then be enforceable and will be enforced.

 

18.           Governing Law.   This Assignment Agreement and the obligations of the Parties hereunder will be governed by and construed in accordance with the laws of the State of Delaware without giving effect to any choice of law principles that may require the application of any other laws.

 

19.           Counterparts.  This Assignment Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

20.           Construction. This Assignment Agreement has been freely and fairly negotiated among the Parties. If an ambiguity or question of intent or interpretation arises, this Assignment Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring either Party because of the authorship of any provision of this Assignment Agreement. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.” The word “person” includes individuals, entities and governmental bodies. Pronouns in masculine, feminine and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “this Assignment Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Assignment Agreement as a whole and not to any particular subdivision unless expressly so limited. The Parties intend that each representation, warranty and covenant contained herein will have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached will not detract from or mitigate the fact that the Party is in breach of the first representation, warranty or covenant.

 

21.           Headings.  The section headings contained in this Assignment Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Assignment Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

 

 

	
 
    	
GULFPORT ENERGY   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
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14313 N. May,   Suite 100
    
	
 
    	
 
    	
Oklahoma City, OK   73134
    
	
 
    	
 
    	
Attn: Paul   Heerwagen
    
	
 
    	
 
    	
Phone: (405)   242-4888
    
	
 
    	
 
    	
Facsimile: (405)   848-8816
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WINDSOR OHIO LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
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RHINO EXPLORATION   LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
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Signature page to Assignment and Assumption Agreement

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