Document:

ex4-12.htm

Exhibit 4.12

 

 

 

 

 

 

EMPLOYMENT AGREEMENT

 

This employment agreement (the “Agreement”) has been made on this 10 January, 2011, by and between:

 

	
1.

	
DHT Management AS, a company incorporated under the laws of Norway having its registered office at Haakon VII’s gt 1, Oslo, Norway (“Employer”), and

	  	  
	  	
Trygve P. Munthe, an individual having his address in Lille Borgen vei 11, 0370 Oslo, Norway (“Executive”).

	  	  
	  	
WHEREAS

	  	  
	
A.

	
The Employer is party to a service agreement dated 31st January 2006 as subsequently amended (the “Service Agreement”) with its parent company DHT Holdings Inc. (the “Parent Company”) whereby the Employer has agreed to provide services to the Parent Company within the areas of financial reporting, management and control as well as certain other management and administrative services;

	  	  
	
B.

	
Employer desires to employ Executive as its Managing Director;

	  	  
	
C.

	
Executive is willing to serve in the employ of Employer upon the other terms and conditions of this Agreement.

	  	  
	  	
Now, therefore, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:

	  	  
	
1.

	
EMPLOYMENT

	  	  
	
1.1

	
Effectiveness

	  	  
	  	
This Agreement shall become effective when executed.

	  	  
	
1.2

	
Commencement

	  	  
	  	
The Executive’s employment under this Agreement shall commence on 1 September 2010, or such date as the parties shall agree (the “Commencement Date”), and shall remain until terminated by one of the parties.

	  	  
	
1.3

	
Position

	  	  
	  	
The Executive shall serve as Managing Director of the Employer and shall together with Svein Moxnes Harfjeld oversee the daily administration and management of the Employer. He is obliged to comply with all applicable laws and regulations pertaining to the position as Managing Director.

	  	  
	  	
The Executive shall together with Svein Moxnes Harfjeld be responsible for leading and overseeing the provision of services by the Employer to the Parent Company pursuant to the Service Agreement.

	  	  
	  	
The Employer may instruct Executive to accept appointments to the Boards of the Employer’s affiliated companies. Upon termination of employment, Executive shall simultaneously withdraw from such appointments.

	  	  
	
1.4

	
Time and Effort

	  	  
	  	
Executive shall serve Employer faithfully, loyally, honestly and to the best of Executive’s ability. Executive shall devote substantially all of Executive’s business time to the performance of Executive’s duties on behalf of Employer.

	  	  
	  	
Executive shall be employed full time with working hours as determined by Employer at any time. Executive is exempt from the ordinary rules concerning working hours in the Employment Act of 17 June 2005 No. 62, cf. the Employment Act section 10-12, and shall work the amount of time necessary to fulfil the position satisfactory.

	  	  

 

 

  

  

  

 

 

	  	
Executive shall not, directly or indirectly, engage in any employment, board positions or other activity that, in the sole discretion of the Board, is competitive with or adverse to the business, practice or affairs of Employer or any of its affiliates, provided that Executive may serve on civic or charitable boards or committees and serve as a non-employee member of a board of directors of a corporation as to which the Board has given its consent. New Directorships shall be approved by the Chairman of the Board of the Parent Company, such approval not to be unreasonably withheld. A complete list of directorships currently held by the Executive is attached to this Agreement as Attachment 1.

	  	  
	
1.5

	
Location and Travel

	  	  
	  	
Executive’s place of work shall be Employer’s offices in Oslo, Norway.

	  	  
	  	
Executive acknowledges and agrees that his duties and responsibilities to Employer will require him to travel extensively and worldwide from time to time, including to the offices of the Parent Company in the Channel Islands.

	  	  
	
2.

	
COMPENSATION

	  	  
	
2.1

	
Salary

	  	  
	  	
As compensation for all services rendered by Executive to Employer and all its affiliates in any capacity and for all other obligations of Executive hereunder, Employer shall as from the Commencement Date pay Executive a salary (“Salary”) at the annual rate of NOK 3,150,000, i.e. NOK 262,500 per month. The salary includes compensation for work exceeding ordinary working hours.

	  	  
	  	
Holiday allowance is, in accordance with Employer’s practice, paid in lieu of salary in June each year. The Salary is payable monthly net of statutory tax deductions, currently on the 20th of each calendar month, to a bank account specified by Executive.

	  	  
	  	
On an individual basis, the Executive will in case of sickness receive base Salary as set out above for a period of up to 12 months, provided that the Executive is entitled to sick pay according to the National Insurance Act for the same period. When effecting payment, deduction shall be made for benefits recoverable from the National Insurance and / or insurance payment, if any. Compensation according to this paragraph shall not be included in the calculation of holiday allowance.

	  	  
	  	
Executive is not entitled to separate compensation for the board positions performed in accordance with Clause 1.3 above unless agreed with the Board.

	  	  
	  	
Executive is entitled to have his salary reviewed, and where appropriate, adjusted annually with the first such review to take place in January 2012.

	  	  
	
2.2

	
Insurance and pension

	  	  
	  	
The Employer will, and subject to the Executive qualifying for a regular insurance policy, arrange for an individual life insurance scheme according to which the insurance sum for the beneficiaries (spouse or heir) will be up to a maximum of NOK 5,000,000, subject to the at any time applicable terms.

	  	  
	  	
The Employer shall also, to the extent that this is possible and subject to the terms applicable, include the Executive in the Employer’s current insurance for the board of directors.

	  	  
	  	
The Employer will establish a collective occupational pension scheme (“tjenestepensjonsordning”) that will provide pension on salaries up to 12 times the Norwegian Insurance Scheme’s base amount (“Grunnbeløpet”). The pension scheme will include all employees employed by the Employer.

	  	  

 

 

  

2

  

 

 

	  	
In addition, the Employer shall enter into a savings insurance agreement (“top hat insurance”) with a Norwegian life insurance company. The premium shall be fixed at NOK 25,000 per month and shall be paid until the Executive reaches 67 years, provided that he is employed by the Employer. The premium payments shall be taken into consideration when considering the cash (bonus) award under clause 2.4.

	  	  
	  	
If the Executive has committed serious breach of his obligations under the employment relation in a way that would give the Employer a right to dismiss him with immediate effect, cf. the Working Environment Act, section 14-15, the Executive’s future rights under this clause 2.2 shall lapse with immediate effect.

	  	  
	  	
The Employer is not liable for any tax payable by the Executive on the Employer’s premium or pension payments under this Agreement.

	  	  
	
2.3

	
Long Term Incentives

	  	  
	  	
The Executive is entitled to participate in the Long Term Incentive awards under the Group Incentive Compensation Plan applicable at any time. The Long term Incentive plan is meant to be an important part of total Executive Compensation.

	  	  
	
2.4

	
Cash Bonus Awards

	  	  
	  	
The Executive may receive a discretionary cash bonus award which is determined annually by the Board on the recommendation of the Compensation Committee. The annual cash bonus award will range from 0 % to a maximum of 100 % of the annual salary. The level of the bonus will be guided by the performance in respect to annual KPIs to be agreed with the board; as a guide the target compensation for each year under this Agreement is intended to be a bonus of 50 % of annual salary.

	  	  
	  	
Bonus, if any, is to be paid out for the first time in 2012 (for the period September 2010 to December 2011, i.e. 16 months).

	  	  
	  	
The Employers payment to the additional pension saving paid to the Norwegian life insurance company as described in clause 2.2 above shall be taken into consideration when considering annual bonus under this clause.

	  	  
	  	
To the extent cash bonus shall be included in the calculation of holiday allowance according to mandatory law, the cash bonus includes mandatory holiday allowance set out by Norwegian law. However, the amount of the cash bonus that equals the holiday allowance is, in accordance with the Holiday Act, payable in the year following the qualifying year, i.e. the holiday year.

	  	  
	
2.5

	
Vacation

	  	  
	  	
Executive is entitled to holiday and holiday allowances in accordance with the Act of 29 April 1988 No. 21 relating to holidays and Employer’s rules from time to time in force.

	  	  
	
2.6

	
Business Expenses

	  	  
	  	
Employer shall reimburse Executive for all necessary and reasonable “out-of-pocket” business expenses incurred by Executive in the performance of Executive’s duties hereunder, provided that Executive furnishes to Employer adequate records and other documentary evidence required to substantiate such expenditures and otherwise complies with any travel and expense reimbursement policy established by the Board from time to time.

	  	  
	
2.7

	
Withholdings / deductions from salary etc.

	  	  
	  	
Employer and its affiliates may withhold or deduct from any amounts payable under this Agreement such taxes, fees, contributions and other amounts as may be required to be withheld or deducted pursuant to any applicable law or regulation.

	  	  
	  	
Deductions from salary, bonus and holiday allowance may be made only in so far as these are permitted by section 14-15 (2) of the Employment Act, hereunder in;

 

 

 

  

3

  

 

	  	
a.

	
amounts paid to Executive as advance on salary;

	  	  	  
	  	
b.

	
incorrectly paid salary, holiday allowance, bonus etc;

	  	  	  
	  	
c.

	
amounts received as advance on travel or business expenses;

	  	  	  
	  	
d.

	
where amounts, salary etc. have been paid in advance on the condition that the Employer would be reimbursed by the National Insurance etc. and no reimbursement is given;

	  	  	  
	  	
e.

	
the value of any property belonging to the Employer which is not returned upon termination of the employment, or which is returned in a damaged condition, ordinary wear and tear excepted.

	
3.

	
TERMINATION

	  	  
	
3.1

	
General

	  	  
	  	
Upon termination of employment, Executive shall return to Employer all property in his possession, custody or control belonging to Employer, including but not limited to business cards, credit and charge cards, keys, security and computer passes, mobile telephones, personal computer equipment, original and copy documents or other media on which information is held in his possession relating to the business or affairs of the Employer.

	  	  
	
3.2

	
Exemption from the rules regarding termination etc.

	  	  
	  	
The Executive is exempt from the rules regarding termination of employment in the Employment Act, including chapter 15, see section 15-16 subsection 2. The exemption applies regardless of whether the Executive is entitled to severance pay / compensation, whether the employment is terminated with notice or with immediate effect, the reason for termination and whether termination / notice is given by the Employer or the Executive.

	  	  
	  	
In the event that Executive’s employment with Employer is terminated, at any time and for any reason, Executive shall have no further rights to any compensation, payments or any other benefits under this Agreement or any other contract, plan, policy or arrangement with Employer or its affiliates, except as follow from Norwegian mandatory statutory requirements or as set forth in this Section 3.

	  	  
	  	
The Employer may terminate the employment with immediate effect (summary dismissal) if the Executive is guilty a gross breach of duty or other serious breach of the contract of employment.

	  	  
	
3.3

	
Probationary period and notice period

	  	  
	  	
This Agreement has a probationary period of 6 months. During the probationary period, the mutual term of notice shall be 14 days. If the Executive has been absent from work during the probationary period, the probationary period shall be extended accordingly. The Employer shall inform the Executive of the extension in writing prior to the expiry of the probationary period. After the probationary period has expired, the mutual period of notice is 6 months, calculated from the first day of the calendar month immediately following the date upon which notice was given.

	  	  
	  	
The Executive is obliged to resign with immediate effect prior to the end of the notice period if this is considered to be in the interest of the Employer and if requested by the Employer. The right to salary and other contractual benefits during the notice period will not be affected.

	  	  
	
3.4

	
Accrued Rights

	  	  
	  	
Upon the termination of Executive’s employment with Employer, whether by Employer or Executive, at any time and for any reason, Executive shall be entitled to receive (a) Salary earned through the effective date of termination (i.e. end of Notice Period) that remains unpaid as of such date and (b) reimbursement of any unreimbursed business expenses incurred by Executive prior to the effective date of termination to the extent such expenses are reimbursable under Section 2.6 (all such amounts, the “Accrued Rights”).

	  	  

 

 

  

4

  

 

 

	
3.5

	
Compensation in case of Termination by Employer after the expiry of the Probationary period Other Than for Cause

	  	  
	  	
Executive shall have the right to compensation (“Severance payment”) in accordance with the provisions mentioned below in case of termination by the Employer after the expiry of the Probationary period other than for Cause.

	  	
a.

	
If Employer elects to terminate Executive’s employment for any reason other than Cause (as defined below) Employer shall continue to pay Executive’s base monthly salary as set out in 2.1 (Severance payment) in arrears on a monthly basis for eighteen -18- months from the month immediately following the expiry of the notice period. Severance payment in this Section 3 does not form the basis for holiday pay or pension benefits. When effecting payment, deduction shall be made for tax and social benefits as prescribed by law. Executive’s rights under this clause 3.5 are subject to the following conditions: (i) that Executive signs a employment termination agreement with the Employer under which the Executive agrees not to dispute a possible dismissal on the part of the Employer or the terms and conditions for such a dismissal, and waives any and all claims against the Employer, the Parent Company and their respective affiliates, directors, officers, employees, agents and representatives in form and substance acceptable to Employer in relation to Executive’s resignation, and (ii) that the Executive immediately complies with any request from Employer to actually terminate Executive’s employment and/or is released from the duty to work and/or to perform other duties. In the case of such actual termination, the provisions in clause 2.1 on salary shall apply in full for the rest of the notice period.

	 	 	 
	  	
b.

	
Executive shall forfeit any entitlement to receive payments due under this clause 3.5 in the event that Executive breaches any of his obligations under Section 4.

	  	  	  
	  	
c.

	
For purposes of this Agreement, the term “Cause” shall mean (i) Executive’s dishonesty or breach of any fiduciary duty to Employer in the performance of Executive’s duties hereunder, (ii) Executive’s conviction of, or a plea of guilty or nolo contendere to, a misdemeanor involving moral turpitude, fraud, dishonesty, theft, unethical business conduct or conduct that impairs the reputation of Employer or any of its affiliates or any felony (or the equivalent thereof in any jurisdiction), (iii) Executive’s gross negligence or wilful misconduct in connection with Executive’s duties hereunder or any act or omission that is injurious to the financial condition or business reputation of Employer or any of its affiliates, (iv) the Executive’s gross breach of duty or other serious breach of this Agreement.

	  	  	  
	  	
d.

	
The right to Severance payment shall not apply if the Executive is entitled to old age or disability pension from the expiry of the notice period. If the Executive is entitled to old age or disability pension during the period that he receives Severance payment according to this clause 3.5, the right to Severance payment shall lapse from the date that the right to old age or disability pension commences.

	
3.6

	
Change of Control

	  	
a.

	
In the event that Executive’s employment is terminated by Executive for Good Reason within six months following a Change of Control, Executive shall in addition to ordinary salary during the notice period, receive Severance payment equivalent to 18 months’ Salary, see clause 2.1. Severance payment pursuant to this Clause shall be payable in arrears in equal monthly instalments on the Employer’s pay day from the month immediately following the expiry of the notice period. Severance pay according to this clause shall not form basis for holiday pay or pension benefits. The right to Severance pay shall not apply in case of the Executive’s gross breach of duty or other serious breach of this Agreement. When effecting payment, deduction shall be made for tax and social benefits as prescribed by law. In addition, the Executive shall be entitled to 100 % bonus in accordance with clause 2.4 for the actual period he has worked that year and all granted, but not yet vested shares shall vest immediately and become exercisable.

	  	  	  

 

 

  

5

  

 

 

	  	
b.

	
For purposes of this Agreement, the term

	  	  	
(i)

	
“Change of Control” shall mean the occurrence of any of the following events:

	  	  	  	
A.

	
the consummation of

	  	  	  	  	
1.

	
a merger, consolidation, statutory share exchange or similar form of corporate transaction involving (x) Parent Company or (y) any entity in which Parent Company, directly or indirectly, possesses 50% or more of the total combined voting power of all classes of its stock, but in the case of this clause (y) only if Parent Company Voting Securities (as defined below) are issued or issuable in connection with such transaction (each of the transactions referred to in this clause (1) being hereinafter referred to as a “Reorganization”) or

	  	  	  	  	  	  
	  	  	  	  	
2.

	
the sale or other disposition of all or substantially all the assets of the Parent Company to an entity that is not an affiliate (a “Sale”)

	  	  	  	  	  	  
	  	  	  	  	  	
in either case, if such Reorganization or Sale requires the approval of Parent Company’s stockholders under the law of the Parent Company’s jurisdiction of organization (whether such approval is required for such Reorganization or Sale or for the issuance of securities of the Parent Company in such Reorganization or Sale), unless, immediately following such Reorganization or Sale, (I) all or substantially all the individuals and entities who were the “beneficial owners” (as such term is defined in Rule 13d-3 under the Exchange Act (or a successor rule thereto)) of the Shares or other securities eligible to vote for the election of the Board (collectively, the “Parent Company Voting Securities”) outstanding immediately prior to the consummation of such Reorganization or Sale beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the entity resulting from such Reorganization or Sale (including, without limitation, an entity that as a result of such transaction owns Parent Company or all or substantially all the Parent Company’s assets either directly or through one or more subsidiaries) (the “Continuing Entity”) in substantially the same proportions as their ownership, immediately prior to the consummation of such Reorganization or Sale, of the outstanding Parent Company Voting Securities (excluding any outstanding voting securities of the Continuing Entity that such beneficial owners hold immediately following the consummation of the Reorganization or Sale as a result of their ownership prior to such consummation of voting securities of any entity involved in or forming part of such Reorganization or Sale other than Parent Company and its affiliates) and (II) no Person beneficially owns, directly or indirectly, 50 % or more of the combined voting power of the then outstanding voting securities of the Continuing Entity immediately following the consummation of such Reorganization or Sale;

	  	  	  	
B.

	
the stockholders of Parent Company approve a plan of complete liquidation or dissolution of Parent Company; or

	  	  	  	  	  
	  	  	  	
C.

	
any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act, respectively) (other than Employer or an affiliate) becomes the beneficial owner, directly or indirectly, of securities of Parent Company representing 50% or more of the then outstanding Parent Company Voting Securities; provided that for purposes of this subparagraph (C), any acquisition directly from Parent Company shall not constitute a Change of Control.

 

 

 

  

6

  

 

	  	  	
(ii)

	
“Good Reason” shall mean the occurrence of any of the following events or circumstances (without the prior written consent of Executive): (A) a material reduction of Executive’s authority or a material change in Executive’s functions, duties or responsibilities, (B) a reduction in Executive’s Salary, (C) a requirement that the Executive report to anyone other than the Board, (D) that the change of control, as defined above, leads to a material change of the business of the Employer or the Parent Company, (E) that the change of control, as defined above, leads to investments, divestments or other material decisions based on other criteria than before the change of control or (F) a breach by Employer of any material obligation of Employer under this Agreement (which breach has not been cured within 30 days after written notice thereof is provided to Employer by Executive specifically identifying such breach in reasonable detail).

	
4.

	
EXECUTIVE COVENANTS

	  	  
	
4.1

	
Employer’s Interests

	  	  
	  	
Executive acknowledges that Employer has expended substantial amounts of time, money and effort to develop business strategies, substantial customer and supplier relationships, goodwill, business and trade secrets, confidential information and intellectual property and to build an efficient organization and that Employer has a legitimate business interest and right in protecting those assets as well as any similar assets that Employer may develop or obtain following the Commencement Date. Executive acknowledges and agrees that the restrictions imposed upon Executive under this Agreement are reasonable and necessary for the protection of such assets and that the restrictions set forth in this Agreement will not prevent Executive from earning an adequate and reasonable livelihood and supporting his dependents without violating any provision of this Agreement. Executive further acknowledges that Employer would not have agreed to enter into this Agreement without Executive’s agreeing to enter into, and to honour the provisions and covenants of, this Section 4. Therefore, Executive agrees that, in consideration of Employer’s entering into this Agreement and Employer’s obligations hereunder and other good and valuable consideration, the receipt of which is hereby acknowledged by Executive, Executive shall be bound by, and agrees to honour and comply with, the provisions and covenants contained in this Section 4 following the Commencement Date.

	  	  
	
4.2

	
Scope of Covenants

	  	  
	  	
For purposes of this Section 4, the term “Employer” includes Employer’s affiliates, and its and their predecessors, successors and assigns.

	  	  
	
4.3

	
Non-Disclosure of Confidential Information

	  	
a.

	
Executive acknowledges that, in the performance of his duties as an employee of Employer, Executive may be given access to Confidential Information (as defined below). Executive agrees that all Confidential Information has been, is and will be the sole property of Employer and/or the Parent Company and that Executive has no right, title or interest therein. Executive shall not, directly or indirectly, disclose or cause or permit to be disclosed to any person, or utilize or cause or permit to be utilized, by any person, any Confidential Information acquired pursuant to Executive’s employment with Employer (whether acquired prior to or subsequent to the execution of this Agreement or the Commencement Date) or otherwise, except that Executive may (i) utilize and disclose Confidential Information as required in the discharge of Executive’s duties as an employee of Employer in good faith, subject to any restriction, limitation or condition placed on such use or disclosure by Employer and/or the Parent Company, and (ii) disclose Confidential Information to the extent required by applicable law or as ordered by a court of competent jurisdiction.

	  	  	  

 

 

  

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b.

	
For purposes of this Agreement, “Confidential Information” shall include , but not be limited to, trade secrets and confidential or proprietary information, knowledge or data that is or will be used, developed, obtained or owned by Employer, Parent Company or any of their affiliates relating to the business, operations, products or services of Employer, Parent Company or any such affiliate or of any customer, supplier, employee or independent contractor thereof, including products, services, fees, pricing, designs, marketing plans, strategies, analyses, forecasts, formulas, drawings, photographs, reports, records, computer software (whether or not owned by, or designed for, Employer, Parent Company or any of their affiliates), operating systems, applications, program listings, flow charts, manuals, documentation, data, databases, specifications, technology, inventions, developments, methods, improvements, techniques, devices, products, know-how, processes, financial data, customer or supplier lists, contact persons, cost information, regulatory matters, employee information, accounting and business methods, trade secrets, copyrightable works and information with respect to any supplier, customer, employee or independent contractor of Employer, Parent Company or any of their affiliates in each case whether patentable or unpatentable, whether or not reduced to writing or other tangible medium of expression and whether or not reduced to practice, and all similar and related information in any form; provided, however, that Confidential Information shall not include information that is generally known to the public other than as a result of disclosure by Executive in breach of this Agreement or in breach of any similar covenant made by Executive or any other duty of confidentiality.

	
4.4

	
Intellectual property

	  	  
	  	
All intellectual property rights, including patentable inventions, trademarks, design rights or copyrights, that are created or developed by the Executive during the course of his employment with the Employer shall fully and wholly devolve upon the Employer. The same applies to similar creations that are not legally protected by patent, copyright or similar but that the Employer has an interest in employing. The Employer shall have an unrestricted, exclusive and gratuitous right to exploit such intellectual property rights and creations. Such intellectual property rights and creations shall without exception be deemed to have been created or developed in the course of the Executive’s employment if the exploitation of the right or creation falls within the scope of the Employer’s business. This applies notwithstanding that the Executive has created or developed the right outside working hours or outside the Employer’s premises. The Executive shall of his own accord inform the Employer of any rights that may fall within the scope of this clause, unless it is obvious that the Employer is already aware of the right. This clause shall not limit or restrict the Executive’s rights pursuant to any mandatory statutory provision of Norwegian law, including the Act relating to Employee Inventions of 17 April 1970 No. 21 and the Copyright Act of 15 December 1967 No. 9.

	  	  
	
4.5

	
Non-Competition and Non-Solicitation

	  	
a.

	
For the Restricted Period (as defined below) and subject to any limitations set by Norwegian law, Executive shall not directly or indirectly, without the prior written consent of the Board:

	  	  	
(i)

	
engage in any activity or business, whether as employee or in any other capacity, or establish any new business, in any location that is involved with the voyage chartering or time chartering of crude oil tankers, including assisting any person in any way to do, or attempt to do, any of the foregoing;

	  	  	  	  
	  	  	
(ii)

	
solicit any person that is a customer or client or has been a customer or client for the last 12 months (or prospective customer or client) of Employer, Parent Company or any of their affiliates to purchase any goods or services of the type sold by Employer, Parent Company or any of their affiliates from any person other than Employer, Parent Company or any of their affiliates or to (A) reduce or refrain from doing (or otherwise change the terms or conditions of) any business with Employer, Parent Company or any of their affiliates, (B) interfere with or damage (or attempt to interfere with or damage) any relationship between Employer, Parent Company or any of their affiliates and their respective employees, customers, clients, vendors or suppliers (or any person that Employer, Parent Company or any of their affiliates have approached or have made significant plans to approach as a prospective employee, customer, client, vendor or supplier) or any governmental authority or any agent or representative thereof or (C) assist any person in any way to do, or attempt to do, any of the foregoing; or

	  	  	  	  

 

 

  

8

  

 

 

	  	  	
(iii)

	
form, or acquire a two (2%) percent or greater equity ownership, voting or profit participation interest in, any Competitor.

	  	
b.

	
For purposes of this Agreement, the term “Restricted Period” shall mean a period commencing on the Commencement Date and terminating one year from the date the employment ceases, regardless of the reason why the employment ceases. The Restricted Period shall be tolled during (and shall be deemed automatically extended by) any period in which Executive is in violation of this Section 4.5.

	  	  	  
	  	
c.

	
For purposes of this Agreement, the term “Competitor” means any person that engages in any activity, or owns or controls a significant interest in any person that engages in any activity, in the voyage chartering and time chartering of crude oil tankers; provided that a Competitor shall not include any person who the Board has deemed, through its prior written approval, not to be a Competitor.

	  	  	  
	  	
d.

	
If the Executive resigns to join another potentially competing business as defined in 4.5 a., he shall in writing inform the Chairman of the Board of the Parent Company accordingly. The Board shall then within 5 working days respond to this in writing, stating whether or not the Employer wants to invoke its non-compete rights according to this clause 4.5 a. If the Board elects to use its non-compete rights, then the Executive shall receive full salary and benefits, but no cash bonus or further long term incentive awards, during the entire Restricted Period.

	  	  	  
	  	
e.

	
In the event of breach of the Executive’s duties in this Section 4.5, the Employer may demand that the breach ceases immediately and that the Executive upon request and at the absolute discretion of the Employer pays liquidated damages in the amount equal to one - 1 - month’s base salary, for every month or part of a month that he acts in breach of the prohibitions. In addition, the right to compensation pursuant to this Section and severance pay, if any, according to Section 3 shall lapse from the day the Executive acted in breach of this Section 4.5. Payment of liquidated damages and/or damages does not exempt the Executive from complying with the provisions of this Section 4.5.

	
4.6

	
Records

	  	  
	  	
All memoranda, books, records, documents, papers, plans, information, letters, computer software and hardware, electronic records and other data relating to Confidential Information, whether prepared by Executive or otherwise, in Executive’s possession shall be and remain the exclusive property of Employer and/or the Parent Company, and Executive shall not directly or indirectly assert any interest or property rights therein. Upon termination of employment with Employer for any reason, and upon the request of Employer at any time, Executive will immediately deliver to Employer all such memoranda, books, records, documents, papers, plans, information, letters, computer software and hardware, electronic records and other data, and all copies thereof or therefrom, and Executive will not retain, or cause or permit to be retained, any copies or other embodiments of such materials.

	  	  
	
4.7

	
Executive Representations and Warranties

	  	  
	  	
Executive represents and warrants to Employer that the execution and delivery of this Agreement by Executive and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, or conflict with the terms of any contract, agreement, arrangement, policy or understanding to which Executive is a party or otherwise bound.

	  	  

 

 

  

9

  

 

 

	
4.8

	
Cooperation

	  	  
	  	
Following the termination of Executive’s employment, Executive shall provide reasonable assistance to and cooperation with Employer in connection with any suit, action or proceeding (or any appeal therefrom) relating to acts or omissions that occurred during the period of Executive’s employment with Employer. Employer shall reimburse Executive for any reasonable expenses, including time, incurred by Executive in connection with the provision of such assistance and cooperation.

	  	  
	
5.

	
AGE OF RETIREMENT

	  	  
	
5.1

	
The retirement age for the position shall be 67 years.

	  	  
	
6.

	
MISCELLANEOUS

	  	  
	
6.1

	
Assignment

	  	  
	  	
This Agreement is personal to Executive and shall not be assignable by Executive. The parties agree that any attempt by Executive to delegate Executive’s duties hereunder shall be null and void. Employer may assign this Agreement and its rights and obligations thereunder, in whole or in part, to any person that is an affiliate, or a successor in interest to substantially all the business or assets, of Employer or Parent Company. Upon such assignment, the rights and obligations of Employer hereunder shall become the rights and obligations of such affiliate or successor person, and Executive agrees that Employer shall be released and novated from any and all further liability hereunder. For purposes of this Agreement, the term “Employer” shall mean Employer as hereinbefore defined in the recitals to this Agreement and any permitted assignee to which this Agreement is assigned.

	  	  
	
6.2

	
Successors

	  	  
	  	
This Agreement shall be binding upon and shall inure to the benefit of the successors and permitted assigns of Employer and the personal and legal representatives, executors, administrators, successors, distributees, devisees and legatees of Executive. Executive acknowledges and agrees that all Executive’s covenants and obligations to Employer, as well as the rights of Employer under this Agreement, shall run in favour of and will be enforceable by Employer, its affiliates and their successors and permitted assigns.

	  	  
	
6.3

	
Entire Agreement

	  	  
	  	
This Agreement and its attachments contain the entire understanding of Executive, on the one hand, and Employer on the other hand, with respect to the subject matter hereof, and all oral or written agreements or representations, express or implied, with respect to the subject matter hereof are set forth in this Agreement.

	  	  
	
6.4

	
Amendment

	  	  
	  	
This Agreement may not be altered, modified or amended except by written instrument signed by the parties hereto.

	  	  
	
6.5

	
Notice

	  	  
	  	
All notices, requests, demands and other communications required or permitted to be given under the terms of this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier, return receipt requested, postage prepaid, addressed to the other party as set forth below:

 

 

 

  

10

  

 

	  	
If to Employer:

	
DHT Management AS

	  	  	
P.O. Box 2039 Vika, 0125 Oslo, Norway.

	  	  	
Attn: Board of Directors

	  	
If to Executive:

	
Lille Borgen vei 11

	  	  	
0370 Oslo

	  	
The parties may change the address to which notices under this Agreement shall be sent by providing written notice to the other in the manner specified above.

	  	  
	
6.6

	
Governing Law; Jurisdiction;

	  	  
	  	
This Agreement shall be governed by and construed in accordance with the laws of Norway, and both Employer and Executive submit to the exclusive jurisdiction of the Oslo District Court in all matters arising out of or in connection with this Agreement.

	  	  
	
6.7

	
Severability

	  	  
	  	
If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable in any jurisdiction, then such provision, covenant or condition shall, as to such jurisdiction, be modified or restricted to the extent necessary to make such provision valid, binding and enforceable, or, if such provision cannot be modified or restricted, then such provision shall, as to such jurisdiction, be deemed to be excised from this Agreement and any such invalidity, illegality or unenforceability with respect to such provision shall not invalidate or render unenforceable such provision in any other jurisdiction, and the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

	  	  
	
6.8

	
Survival

	  	  
	  	
Subject to Section 1.1 the rights and obligations of Employer and Executive under the provisions of this Agreement, including Section 4 and 5 of this Agreement, shall survive and remain binding and enforceable, notwithstanding any termination of Executive’s employment with Employer for any reason, to the extent necessary to preserve the intended benefits of such provisions.

	  	  
	
6.9

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

	  	  
	
6.10

	
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.

	  	  

 

 

  

11

  

 

 

	
6.11

	
Construction

	  	
a.

	
The headings in this Agreement are for convenience only, are not a part of this Agreement and shall not affect the construction of the provisions of this Agreement.

	  	  	  
	  	
b.

	
For purposes of this Agreement, the words “include” and “including”, and variations thereof, shall not be deemed to be terms of limitation but rather will be deemed to be followed by the words “without limitation”.

	  	  	  
	  	
c.

	
For purposes of this Agreement, the term “person” means any individual, partnership, company, corporation or other entity of any kind.

	  	  	  
	  	
d.

	
For purposes of this Agreement, the term “affiliate”, with respect to any person, means any other person that controls, is controlled by or is under common control with such person.

 

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

 

 

 

	For and on behalf of DHT MANAGEMENT AS 	 	 	 	 
	 	 	 	 	 
	
/s/ Rolf A.Wikborg

	 	 	
/s/  Trygve P. Munthe

	 
	
Name:  Rolf A.Wikborg

	 	 	
Trygve P. Munthe 

	 
	
Title:    Chair Comp. Comm. 

	 	 	 	 

 

 

 

 

 

 

12assignment.htm

  

  

  

ASSIGNMENT OF NOTE AND LIENS

 

THIS ASSIGNMENT OF NOTE AND LIENS (this "Assignment"), dated effective as of July 27, 2010 (the "Effective Date"), is executed and delivered by SOVEREIGN BANK, a Texas state bank, as a Bank (as hereinafter defined and in such capacity, "Sovereign"), as agent (in such capacity, the "Assignor") on behalf of the Banks party to the Loan Agreement (as hereinafter defined) before the effectiveness hereof (collectively, the "Banks"), and as collateral agent (in such capacity, the "Collateral Agent") on behalf of Macquarie Bank Limited, an Australian bank ("Macquarie") under that certain Intercreditor Agreement (the "Intercreditor Agreement") dated as of July 28, 2009, among the Borrower (as hereinafter defined), Sovereign and Macquarie, to and in favor of THE F&M BANK & TRUST COMPANY, a state chartered bank ("F&M"), as successor Agent (in such capacity, the "Assignee Agent") under the Loan Agreement on behalf of the Banks party to the Loan Agreement after the effectiveness hereof (collectively, the "Assignee Banks").

 

R E C I T A L S:

 

A.           Reference is here made to that certain Loan and Security Agreement dated as of June 29, 2006, among Tengasco, Inc., a Tennessee corporation (the "Borrower") and Citibank, N.A., a national banking association ("Citibank"), formerly known as Citibank Texas, N.A., predecessor to the Assignor and Sovereign, as amended by First Amendment to Loan and Security Agreement dated as of April 13, 2007, as amended by Second Amendment to Loan and Security Agreement dated as of December 17, 2007, as amended by Third Amendment to Loan and Security Agreement dated as of June 2, 2008, as amended by Fourth Amendment to Loan and Security Agreement dated as of January 19, 2009, as amended by Fifth Amendment to Loan and Security Agreement dated as of July 9, 2009, as amended by the Sixth Amendment to Loan and Security Agreement dated as of September 18, 2009, and as amended by Seventh Amendment to Loan and Security Agreement dated as of February 23, 2010 (collectively, and as further amended or modified, the "Loan Agreement").  Under the terms of the Loan Agreement, the Borrower executed and delivered to Citibank that certain promissory note (the "Note") dated June 29, 2006, in the original principal amount of $50,000,000, which Note was previously assigned to Sovereign through that certain Assignment of Notes and Liens dated as of December 17, 2007, from Citibank, as assignor, and Sovereign, as assignee.

 

B.           The Note is governed and secured by, among other documents, (a) the Loan Agreement and (b) the documents listed on Schedule 1 to this Assignment (hereinafter collectively referred to as the "Scheduled Documents").  The Loan Agreement, the Scheduled Documents, and all other mortgages, deeds of trust, financing statements, guaranties, assignments, consents, certificates, resolutions, agreements, pledges and security instruments, if any, of whatever kind or character specifically securing the Loan Rights (as defined below) and covering any of the Collateral (as defined below) are herein collectively called the "Security Documents."

 

C.           Reference is further made to that certain Eighth Amendment to Loan and Security Agreement dated as of July 27, 2010 (the "Eighth Amendment"), among the Assignee Agent, the Assignee Banks and the Borrower, which shall be executed as of the Effective Date.

	
Dallas_1\5551411\4

52247-1 7/23/2010

ASSIGNMENTS AND AGREEMENTS:

 

1. Definitions.  Capitalized terms used but not otherwise defined herein (including within the introductory paragraph and the Recitals hereto) shall have the meanings assigned in the Loan Agreement, as amended by the Eighth Amendment.  As used in this Assignment, the following terms shall have the meanings set forth below:

 

"Assigned Documents" means the Security Documents, the Note, and all other Loan Documents assigned to the Assignee Agent under this Assignment.

 

"Collateral" means any property, whether real or personal, movable or immovable, tangible or intangible, corporeal or incorporeal, of any kind and wherever located, whether now owned or hereafter acquired or created, in or over which a lien, encumbrance or security interest has been, or is purported to have been, granted to or for the benefit of the Assignor, the Banks or the Collateral Agent pursuant to the Security Documents.

 

"Loan Documents" has the meaning assigned such term in the Loan Agreement, except such term shall not include the ISDA Master Agreement (as defined in the Loan Agreement).

 

"Loan Rights" shall mean all of the Assignor's and each Bank's right, title and interest in, to and under the Revolver Loans and the Loan Documents, including without limitation (a) all claims (including claims as defined in Section 101(5) of the United States Bankruptcy Code), suits, cause of action and other rights of the Assignor and each Bank, whether known or unknown, against Borrower or any guarantor or other obligor of the Revolver Loans (each an "Obligor") to the extent, and only to the extent such claims, suits, causes of action and other rights are based upon, arise out of or are related to the Revolver Loans or any of the Loan Documents, (b) all liens against, security interests in and assignments of Collateral of any kind for or in respect of the Revolver Loans or the Loan Documents, but only to the extent the same secure the Revolver Loans; (c) all of the Assignor's and each Bank's rights under any property, liability, and other insurance policies relating to the Loan Documents (to the extent transferable and assignable); (d) all insurance and condemnation proceeds and any rights to any insurance and condemnation proceeds, relating to the Loan Documents to the extent not applied by the Assignor or any Bank to any sums outstanding under the Loan Documents prior to the Effective Date; and (e) all products and proceeds of the foregoing to the extent not applied by the Assignor or any Bank to any sums outstanding under the Loan Documents prior to the Effective Date; provided, however, that notwithstanding the foregoing or any inference to the contrary, "Loan Rights" shall not include any indemnification provisions or reimbursement obligations contained in the Loan Agreement, the Loan Documents and the Security Documents relating to any period prior to the Effective Date, all of which provisions and obligations remain in full force and effect and are fully binding upon Borrower and enforceable by the Assignor and Sovereign.

 

"Revolver Loans" has the meaning assigned such term in the Loan Agreement.

 

2. Assignment.  For good and valuable consideration paid to the Assignor, the receipt and sufficiency of which are hereby acknowledged (including the consideration set forth in a separate payoff letter delivered by the Assignor to the Assignee Agent and also including the Borrower's payment of an assignment fee in the amount of $5,000.00 to the Assignor), and subject to the terms hereof, the Assignor has TRANSFERRED, ASSIGNED, GRANTED and CONVEYED and by these presents TRANSFERS, ASSIGNS, GRANTS and CONVEYS unto the Assignee Agent (a) the Security Documents, (b) all other Loan Rights held by the Assignor and (c) all other Assigned Documents and all indebtedness and obligations owing to the Assignor pursuant to the Assigned Documents, along with all rights, benefits, remedies and privileges under the Assigned Documents, to the extent not included in clauses (a) and (b), "AS IS, WITH ALL FAULTS" AND WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, EITHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR SET FORTH BELOW.  All such rights, titles and interests hereby assigned are hereinafter collectively referred to as the "Assigned Interests".

 

3. Assignment of Note.  For good and valuable consideration paid to Sovereign, the receipt and sufficiency of which are hereby acknowledged, Sovereign has TRANSFERRED, ASSIGNED, GRANTED and CONVEYED and by these presents does hereby TRANSFER, ASSIGN, GRANT and CONVEY unto F&M, as the Assignee Bank, (a) the Note and (b) all other Loan Rights held by Sovereign "AS IS, WITH ALL FAULTS" AND WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, EITHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SOVEREIGN SET FORTH BELOW.

 

4. Acceptance and Assumption.  Assignee Agent accepts the foregoing assignment of the Assigned Interests and agrees to assume, as of the Effective Date, all obligations of the Assignor in its capacities as Agent and a Bank under or pursuant to the Loan Agreement and the other Assigned Documents.  Furthermore, the Assignee Agent agrees to assume, as of the Effective Date, the obligations of the Assignor in its capacities as the mortgagee, secured party, grantee, named beneficiary and holder of security under or pursuant to the Loan Agreement and the other Assigned Documents.

 

5. Limited Representations and Warranties of the Assignor.  The Assignor hereby represents and warrants to the Assignee Agent as follows:  (a) the Assignor is the sole, legal and beneficial owner and holder and has good title to its interest in the Security Documents and the Loan Rights and indebtedness held by the Assignor, and the liens and security interests granted to the Assignor to secure such Loan Rights and indebtedness, all free and clear of any lien, encumbrance or security interest or claim created by, through and under the Assignor, but not otherwise, (b) the Assignor has not assigned, participated, released, subordinated or granted a lien, encumbrance or security interest in any of the Security Documents or the Loan Rights, except for any Collateral released of record, (c) the Assignor has the full power and authority, and has taken all action necessary, to transfer and convey each of the Assigned Documents and the indebtedness evidenced thereby, and to execute this Assignment, (d) except as described in the recitals of this Assignment, no renewal or extension of the Note or the Loan Agreement has been given and (e) the Assignor has not received or issued any written notice of any Event of Default under the Assigned Documents that has not been provided to the Assignee Agent.  The Assignor shall deliver the original stock certificates of the Borrower's subsidiaries to the Assignee Agent upon the Effective Date, and the Assignor shall promptly deliver to the Assignee Agent the original counterparts of the Assigned Documents, to the extent that such original counterparts are in the possession or control of the Assignor.

 

6. Representations and Warranties of Sovereign.  Sovereign hereby represents and warrants to F&M, as the Assignee Bank, as follows:  (a) it is the sole, legal and beneficial owner and holder of and has good title to the Note and its interest in the Loan Rights, all free and clear of any lien, encumbrance or security interest or claim created by, through or under Sovereign, but not otherwise, (b) Sovereign has not assigned, participated, released, subordinated or granted a lien, encumbrance or security interest in the Note or the Loan Rights, except for any Collateral released of record, (c) Sovereign has the full power and authority, and has taken all action necessary, to transfer and convey the Note and the indebtedness evidenced thereby, and to execute this Assignment and (d) except as described in the recitals of this Assignment, no renewal or extension of the Note has been given.

 

7. Endorsement and Delivery of the Note.  Promptly following the execution hereof, Sovereign will deliver to the Assignee Agent, the Note duly endorsed by an allonge endorsement as follows:

 

Pay to the order of The F&M Bank & Trust Company, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, EITHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, except for the express representations and warranties of the undersigned set forth in that certain Assignment of Note and Lien dated as of July 27, 2010, to which the undersigned endorser, among others, is a party.

 

8. Representations and Warranties of the Assignee Agent and each Assignee Bank.  The Assignee Agent and each Assignee Bank represent and warrant to the Assignor and each Bank that:  (a) the Assignee Agent and each Assignee Bank each conducted its own due diligence with respect to the acquisition of the Note, Security Documents, any other Assigned Documents and the Loan Rights, including without limitation, (i) the terms, provisions, validity and enforceability of the Loan Documents, (ii) the perfection or priority of any lien against, security interests in and assignment of any and all of the Collateral, (iii) the value, condition, quality, sufficiency of the description and amount of the Collateral purportedly covered and affected by the Loan Documents and (iv) the financial condition, creditworthiness or other condition of the Borrower and any other Obligor; (b) except as expressly set forth in this Assignment, neither the Assignee Agent nor any Assignee Bank has relied on any statements of the Assignor or the Banks and each is relying solely upon the results of its own due diligence; (c) each has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and to consummate the transactions contemplated hereby.

 

9. INDEMNITY; NON-ASSUMPTION.  THE ASSIGNEE AGENT AND EACH ASSIGNEE BANK HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE ASSIGNOR AND EACH BANK AND THEIR RESPECTIVE SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, REPRESENTATIVES AND ATTORNEYS (COLLECTIVELY THE "INDEMNIFIED PARTIES"), FROM AND AGAINST ANY AND ALL LOSS, LIABILITY, CLAIM, JUDGMENT, DAMAGE AND EXPENSE WHATSOEVER (INCLUDING ATTORNEYS' FEES AND AMOUNTS PAID IN SETTLEMENT) DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED UPON, RESULTING FROM OR OTHERWISE RELATING TO ANY ENFORCEMENT ACTION TAKEN BY THE ASSIGNEE AGENT, ANY ASSIGNEE BANK, OR ANY OF THEIR RESPECTIVE AFFILIATES OR SUBSIDIARIES, IN CONNECTION WITH THE REVOLVER LOANS OR ANY LOAN DOCUMENTS, EXCEPT AND TO THE EXTENT CAUSED BY THE ASSIGNOR'S OR ANY BANK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR RESULTING FROM A MATERIAL INACCURACY OR BREACH OF THE ASSIGNOR'S OR ANY BANK'S EXPRESS REPRESENTATIONS OR WARRANTIES DESCRIBED IN THIS ASSIGNMENT.  BY ITS ACCEPTANCE OF THIS ASSIGNMENT, THE ASSIGNEE AGENT AND EACH ASSIGNEE BANK EXPRESSLY DOES NOT ASSUME AND HEREBY DISCLAIMS ANY LIABILITY OR OBLIGATION FOR ANY LOSS, CLAIM, JUDGMENT, DAMAGE OR EXPENSE WHATSOEVER DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED UPON, RESULTING FROM OR OTHERWISE RELATING TO ANY ACT OR OMISSION BY THE ASSIGNOR, ANY BANK, OR ANY OF THEIR RESPECTIVE AFFILIATES, SUBSIDIARIES OR PREDECESSORS, IN CONNECTION WITH THE REVOLVER LOANS OR ANY LOAN DOCUMENTS, EXCEPT TO THE EXTENT CAUSED BY THE ASSIGNEE AGENT'S OR ANY ASSIGNEE BANK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR RESULTING FROM A MATERIAL INACCURACY OR BREACH OF THE ASSIGNEE AGENT'S OR ANY ASSIGNEE BANK'S EXPRESS REPRESENTATIONS AND WARRANTIES DESCRIBED IN THIS ASSIGNMENT.

 

10. Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH, THE ASSIGNOR AND EACH BANK HEREBY SPECIFICALLY DISCLAIM ANY AND ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION, (A) THE COLLECTABILITY OF THE REVOLVER LOANS, (B) THE ASSETS, LIABILITIES, FINANCIAL CONDITION, RESULTS, PROSPECTS OR CREDITWORTHINESS OF THE BORROWER OR ANY OTHER OBLIGOR, (C) THE VALIDITY AND ENFORCEABILITY OF, OR NON-EXISTENCE OF OFFSETS OR DEFENSES TO, THE LOAN DOCUMENTS; (D) THE VALIDITY, PERFECTION, ENFORCEABILITY OR PRIORITY OF THE LIENS, SECURITY INTERESTS AND ASSIGNMENTS CONTAINED IN THE LOAN DOCUMENTS; (E) THE PROPER RECORDATION OF THE LOAN DOCUMENTS WHICH ARE RECORDED; AND (F) THE VALUE, CONDITION OR USE WHICH MAY BE MADE OF ANY COLLATERAL, THE OPERATIONAL POTENTIAL THEREOF, THE SUITABILITY FOR THE INTENDED PURPOSES, THE CONDITION OF ANY ENVIRONMENTAL MATTERS OR ISSUES, OR THE COMPLIANCE THEREOF WITH GOVERNMENTAL CODES, RULES, REGULATIONS, ORDERS AND LAWS.

 

11. Representations, Warranties and Certain Waivers of the Borrower.  To induce the Assignor to sell, and the Assignee Agent to purchase, the Assigned Interests, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower hereby represents, warrants and acknowledges to the Assignor and the Assignee Agent, and agrees that, as of the date hereof:

 

(a) There are no claims, offsets, defenses or counterclaims against the enforcement of its obligations under the Assigned Documents, and the Assignor is not in default under any of the Assigned Documents.  The Borrower hereby waives any and all such claims, offsets, defenses, counterclaims or defaults, whether known or unknown, arising on or prior to the Effective Date.

 

(b) No release or subordination relating to the Assigned Interests has been executed, and all of the Assigned Interests (except to the extent amended or modified as of the Effective Date) are in full force and effect as described in the Assigned Documents.

 

(c) It fully understands the terms of this Assignment and the consequences of the execution and delivery of this Assignment, including the waivers and releases provided for herein.

 

(d) It has the full power and authority and has taken all action necessary to execute this Assignment and each other document related hereto.

 

(e) It has been afforded an opportunity to have this Assignment reviewed by such attorneys and other persons as Debtor may wish.

 

12. Authorization.  The Assignor and the Banks hereby authorize the Assignee Agent to record this Assignment in each jurisdiction where the Security Documents have been recorded and to file any UCC-3 assignment or transfer documentation in each jurisdiction in which the Security Documents have been recorded in order to provide third parties with constructive notice of the assignments evidenced by this Assignment.

 

13. Resignation as Collateral Agent.  Sovereign hereby resigns as Collateral Agent under those Security Documents executed by Sovereign in such capacity.  F&M has been appointed as successor collateral agent on behalf of Macquarie under that certain Intercreditor Agreement dated as of even date herewith by and among F&M, Macquarie and the Borrower.

 

14. Borrower Consent.  The Borrower hereby (a) consents to the terms and provisions of this Assignment and assumption, (b) ratifies and confirms the Assigned Interests and the Assigned Documents and (c) releases the Assignor from any and all obligations under the Loan Agreement, including, but not limited to obligations to make loans, issue letters of credit or otherwise extend credit.

 

15. Governing Law.  This Assignment is entered into and shall be governed by the laws of the State of Texas, excluding its conflict of laws rules, except to the extent that the assignment of any liens or security interests is mandatorily governed under the laws of the jurisdiction in which the properties subject thereto are located.

 

16. Counterparts.  This Assignment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.

 

17. Additional Documents.  Each of the Assignor, Assignee Agent and Borrower hereby agree to, from time to time and upon reasonable request, execute and deliver to the requesting party any documents which are reasonably necessary to carry out more effectively the purposes of this Assignment, including, without limitation, any financing statements or assignments, properly completed.

 

18. Construction.  The parties hereto acknowledge and agree that neither this Assignment nor the other documents executed pursuant hereto shall be construed more favorably in favor of one than the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation and preparation of this Assignment and the other documents executed pursuant hereto or in connection herewith.

 

19. Entire Agreement.  THIS ASSIGNMENT EMBODIES THE ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ALL PRIOR AGREEMENTS, UNDERSTANDINGS, REPRESENTATIONS OR WARRANTIES, WHETHER ORAL OR WRITTEN, IF ANY, RELATING TO THE SUBJECT MATTER HEREOF, AND MAY BE AMENDED ONLY BY AN INSTRUMENT IN WRITING EXECUTED JOINTLY BY AN AUTHORIZED OFFICER OF EACH OF THE PARTIES HERETO.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

EXECUTED EFFECTIVE as of the 27th day of July, 2010.

 

[This space is left intentionally blank.  Signature pages follow.]

 

ASSIGNMENT OF NOTE AND LIENS – Page 

  

  

  

SOVEREIGN BANK,

as the Assignor and a Bank

By:           s/Ronda Garrett

Name:           Ronda Garrett

Title:           Vice President

THE F&M BANK AND TRUST COMPANY,

as the Assignee Agent and an Assignee Bank

By: s/Christina Kitchens

Name:           Christina Kitchens

Title:           SVP

TENGASCO, INC.,

as the Borrower

By:           s/Jeffrey R. Bailey

Name:           Jeffrey R. Bailey

Title:           CEO

 

ASSIGNMENT OF NOTE AND LIENS – Signature Page

  

  

  

SCHEDULE 1

 

Scheduled Documents

 

	
1.

	
Kansas Mortgage, Assignment of Production, Security Agreement and Financing Statement dated as of June 29, 2006, executed by Tengasco, Inc. and Tennessee Land & Mineral Corporation in favor of Citibank Texas, N.A. (now known as Citibank, N.A.), covering the properties described on Exhibit A attached hereto, recorded as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Barton County, KS

	
7/14/06

	
Book 613, Page 4913

	
Ellis County, KS

	
7/19/06

	
Book 650, Page 572

	
Graham County, KS

	
7/13/06

	
Book 221, Page 932

	
Graham County, KS

(re-recorded)

	
7/17/06

	
Book 222, Page 23

	
Osborne County, KS

	
7/14/06

	
Book 122, Page 65

	
Pawnee County, KS

	
7/18/06

	
Book MG 197, Page 95

	
Rooks County, KS

	
7/10/06

	
Book 360, Page 97

	
Rush County, KS

	
7/13/06

	
Mtg Book 71, Page 895

	
Russell County, KS

	
7/17/06

	
Book 163, Page 558

	
Stafford County, KS

	
7/13/06

	
Book 192, Page 670

	
Trego County, KS

	
7/13/06

	
Book 140, Page 138

as amended by Amendment to Kansas Mortgage, Assignment of Production, Security Agreement and Financing Statement dated as of December 17, 2007, executed by Tengasco, Inc. and Tennessee Land & Mineral Corporation in favor of Sovereign Bank, recorded as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Barton County, KS

	
12/31/07

	
Book 614, Page 4466

	
Ellis County, KS

	
12/27/07

	
Book 684, Page 650

	
Graham County, KS

	
12/27/07

	
Book 230, Page 105

	
Osborne County, KS

	
12/26/07

	
Book MISC 65, Page 207

	
Pawnee County, KS

	
12/27/07

	
Book MG 202, Page 143

	
Rooks County, KS

	
12/28/07

	
Book 379, Page 272

	
Rush County, KS

	
12/27/07

	
Mtg. Book 74, Page 165

	
Russell County, KS

	
12/28/07

	
Book 169, Page 590

	
Stafford County, KS

	
12/28/07

	
Book 201, Page 490

	
Trego County, KS

	
12/27/07

	
Book 149, Page 525

as amended by Amendment to Kansas Mortgage, Assignment of Production, Security Agreement and Financing Statement, and Negative Pledge dated as of September 18, 2009, executed by Tengasco, Inc., Tennessee Land & Mineral Company, Tengasco Pipeline Corporation and Manufactured Methane Corporation in favor of Sovereign Bank, acting as a lender on its own behalf and as collateral agent on behalf of Macquarie Bank Limited, recorded as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Barton County, KS

	  	  
	
Ellis County, KS

	  	  
	
Graham County, KS

	  	  
	
Osborne County, KS

	  	  
	
Pawnee County, KS

	  	  
	
Rooks County, KS

	  	  
	
Rush County, KS

	  	  
	
Russell County, KS

	  	  
	
Stafford County, KS

	  	  
	
Trego County, KS

	  	  

	
2.

	
Deed of Trust, Mortgage, Assignment of Production, Security Agreement and Financing Statement dated as of June 29, 2006, executed by Tengasco, Inc., Tengasco Pipeline Corporation and Tennessee Land & Mineral Corporation in favor of Citibank Texas, N.A. (now known as Citibank, N.A.), recorded as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Hancock County, TN

	
7/11/06

	
Book 19, Page 565

	
Hawkins County, TN

	
7/11/06

	
Book 813, Page 420

	
Sullivan County, TN

	
7/12/06

	
Book 2422C, Page 1

as amended by Amendment to Deed of Trust, Mortgage, Assignment of Production, Security Agreement and Financing Statement dated as of December 17, 2007, executed by Tengasco, Inc., Tennessee Land & Mineral Corporation and Tengasco Pipeline Corporation in favor of Sovereign Bank, recorded as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Hancock County, TN

	
12/27/07

	
Book 27, Page 651

	
Hawkins County, TN

	
12/27/07

	
Book 889, Page 594

	
Sullivan County, TN

	
12/27/07

	
Book 2619C, Page 630

	
3.

	
Negative Pledge dated as of December 17, 2007, executed by Tengasco, Inc. and Tennessee Land & Mineral Company in favor of Sovereign Bank, recorded as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Barton County, KS

	
12/31/07

	
Book 614, Page 4468

	
Ellis County, KS

	
12/27/07

	
Book 684, Page 706

	
Graham County, KS

	
12/27/07

	
Book 230, Page 161

	
Osborne County, KS

	
12/26/07

	
Book MISC 65, page 208

	
Pawnee County, KS

	
12/27/07

	
Book MA2, Page 384

	
Rooks County, KS

	
12/28/07

	
Book 379, Page 293

	
Rush County, KS

	
12/27/07

	
Mtg Book 74, Page 221

	
Russell County, KS

	
12/28/07

	
Book 169, Page 646

	
Stafford County, KS

	
12/28/07

	
Book 201, Page 549

	
Trego County, KS

	
12/27/07

	
Book 149, Page 581

	
4.

	
Negative Pledge dated as of December 17, 2007, executed by Tengasco, Inc., Tennessee Land & Mineral Company, Tengasco Pipeline Corporation and Manufactured Methane Corporation in favor of Sovereign Bank, recorded as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Hancock County, TN

	
12/27/07

	
Book 27, Page 668

	
Hawkins County, TN

	
12/27/07

	
Book 889, Page 611

	
Sullivan County, TN

	
12/27/07

	
Book 2619C, Page 647

	
5.

	
UCC-1 Financing Statement with respect to the mortgage described in item 1 above, recorded as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Barton County, KS

	
7/14/06

	
UCC #8500

	
Ellis County, KS

	
7/19/06

	
UCC #71

	
Graham County, KS

	
7/13/06

	
PS #2006-028

	
Osborne County, KS

	
7/14/06

	
UCC #06-20

	
Pawnee County, KS

	
7/18/06

	
UCC #06-00065

	
Rooks County, KS

	
7/10/06

	
UCC #2006-31

	
Rush County, KS

	
7/13/06

	
UCC #38

	
Russell County, KS

	
7/17/06

	
UCC #06-54

	
Stafford County, KS

	
7/13/06

	
Book 2006, Page 51

	
Trego County, KS

	
7/13/06

	
UCC Fixture Filing #2006-21

as amended by UCC Financing Statement Amendment, recorded as follows:

	
Jurisdiction

	
Recording Data

	
Barton County, KS

	
UCC #8797

	
Ellis County, KS

	
UCC #Page T

	
Graham County, KS

	
#2007-040

	
Osborne County, KS

	
#07-36

	
Pawnee County, KS

	
UCC # 07-00136

	
Rooks County, KS

	
#2007-64

	
Rush County, KS

	
UCC #56

	
Russell County, KS

	
Book FS-4, Page T-53

	
Stafford County, KS

	
Book 2006, Page 51ASG

	
Trego County, KS

	
Amendment #22006-21

	
6.

	
UCC-1 Financing Statement with respect to the deed of trust described in item 2 above, filed as follows:

	
Jurisdiction

	
Recording Date

	
Recording Data

	
Tennessee Secretary of State

	
8/3/06

	
UCC1 306-147547

ASSIGNMENT OF NOTE AND LIENS – Schedule 1

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