Document:

Exhibit 10.4

 

EMPLOYEE BENEFITS AGREEMENT

 

This Employee Benefits Agreement, dated as of [·], 2014, is entered into by and between Nabors Industries Ltd., a Bermuda exempted Company (“Navy”), Nabors Red Lion Limited, a Bermuda exempted Company and currently a wholly owned Subsidiary of Navy (“Red Lion”), and C&J Energy Services, Inc., a Delaware corporation (“Penny,” and together with Navy and Red Lion, the “Parties”), effective as between Navy and Red Lion at the Separation Time and effective as among all the Parties at the Effective Time (as defined below).

 

RECITALS:

 

WHEREAS, in connection with the transactions contemplated by the Separation Agreement entered into by Navy and Red Lion (the “Separation Agreement”), the Merger Agreement entered into by the Parties (the “Merger Agreement”), and the Transition Services Agreement entered into by Navy and Red Lion (the “Transition Services Agreement”), in each case on or about the date hereof, the Parties have agreed to enter into this Agreement to allocate among Navy, Red Lion and Penny the Assets, Liabilities and responsibilities with respect to certain employee compensation, pension and benefit plans, programs and arrangements and certain employment matters;

 

NOW THEREFORE, in consideration of the foregoing and the mutual agreements, covenants and other provisions set forth in this Agreement, the Parties hereby agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Unless otherwise defined in this Agreement, capitalized words and expressions and variations thereof used in this Agreement or in its Exhibits have the meanings set forth below.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Separation Agreement.

 

1.1                               “Agreement” means this Employee Benefits Agreement, including all the Exhibits hereto.

 

1.2                               “Benefit Continuation Period” means the period of time from the Effective Time through the earlier of (i) the one-year anniversary of the Effective Time and (ii) December 31, 2015.

 

1.3                               “Canadian Defined Contribution Plan” has the meaning given to it in Section 2.4(b).

 

1.4                               “Code” means the Internal Revenue Code of 1986, as amended, or any successor federal income tax Law.  Reference to a specific Code provision also includes any proposed, temporary or final regulation in force under that provision.

 

1.5                               “Continuing Employees” has the meaning given to it in Section 2.1.

 

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1.6                               “Covered Flex Plan Employees” has the meaning given to it in Section 3.3.

 

1.7                               “Effective Time” has the meaning given to it in the Merger Agreement.

 

1.8                               “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.  Reference to a specific provision of ERISA also includes any proposed, temporary or final regulation in force under that provision.

 

1.9                               “Merger Agreement” has the meaning given to it in the preamble to this Agreement.

 

1.10                        “Navy” has the meaning given to it in the preamble to this Agreement.

 

1.11                        “Navy 401(k) Plan” has the meaning given to it in Section 6.2

 

1.12                        “Navy Employee Benefit Plan” means any employee benefit plan, program, policy, practice, agreement, or other arrangement providing benefits to any current or former employee, consultant, officer or director of Navy or any of its Subsidiaries or any beneficiary or dependent thereof that is entered into, sponsored or maintained by Navy or any of its Subsidiaries, whether or not written, including any employee welfare benefit plan within the meaning of Section 3(1) of ERISA, any employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not any such plan is subject to ERISA) and any bonus, incentive, deferred compensation, vacation, insurance, stock purchase, stock option, equity award, equity-linked award, severance, retention, employment, change of control or fringe benefit plan, program, policy, practice, agreement, or arrangement.

 

1.13                        “Navy Flex Plan” has the meaning given to it in Section 3.3.

 

1.14                        “Navy Nonqualified Plans” has the meaning given to it in Section 6.3(a).

 

1.15                        “Navy U.S. DB Plan” has the meaning given to it in Section 6.1.

 

1.16                        “Navy U.S. DB Plan Trust” has the meaning given to it in Section 6.1.

 

1.17                        “New Plans” has the meaning given to it in Section 3.2(a).

 

1.18                        “Nonqualified Plan Participants” has the meaning given to it in Section 6.3(b).

 

1.19                        “Penny” has the meaning given to it in the preamble to this Agreement.

 

1.20                        “Penny Common Stock” has the meaning given to it in the Merger Agreement.

 

1.21                        “Penny Employee” means each individual who is employed by Penny or a Subsidiary of Penny immediately prior to the Effective Time.

 

1.22                        “Penny Employee Benefit Plan” has the meaning given to it in the Merger Agreement.

 

1.23                        “Red Lion” has the meaning given to it in the preamble to this Agreement.

 

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1.24                        “Red Lion Employee” means any individual who, immediately prior to the Effective Time, is employed by a Red Lion Entity, including any individual absent due to short-term medical leave, long-term medical leave, vacation, holiday or leave of absence, including military leave and leave under the Family and Medical Leave Act, but excluding those individuals listed on Exhibit A.

 

1.25                        “Red Lion Employee Benefit Plan” has the meaning given to it in the Merger Agreement.

 

1.26                        “Red Lion Group 401(k) Plan” has the meaning given to it in Section 6.2.

 

1.27                        “Red Lion Group Flex Plan” has the meaning given to it in Section 3.3.

 

1.28                        “Red Lion Group Severance Plan” has the meaning given to it in Section 3.1(a).

 

1.29                        “Red Lion Self-Insured Workers’ Compensation Liabilities” has the meaning given to it in Section 2.5(a).

 

1.30                        “Red Lion Workers’ Compensation Claims” mean all Liabilities under or in connection with workers’ compensation benefits with respect to any Continuing Employee or any other Person who is or was employed by a Red Lion Entity, in each case, arising from an Action asserted upon or after the Separation Time.

 

1.31                        “Separation Agreement” has the meaning given to it in the preamble to this Agreement.

 

1.32                        “Transaction Agreements” has the meaning given to it in the Merger Agreement.

 

1.33                        “Transferred Account Balances” has the meaning given to it in Section 3.3.

 

1.34                        “TSA Period” has the meaning given to it in Section 2.4(b).

 

ARTICLE II
 EMPLOYMENT OF RED LION EMPLOYEES;
 SEVERANCE; ASSUMPTION AND RETENTION OF LIABILITIES;
 RED LION PARTICIPATION IN NAVY EMPLOYEE BENEFIT PLANS;
 RED LION WORKERS COMPENSATION CLAIMS

 

2.1                               Employment of Red Lion Employees.  All Red Lion Employees who are employed by a Red Lion Entity immediately prior to the Effective Time are referred to herein as “Continuing Employees.”

 

2.2                               Severance.  A Continuing Employee shall not be deemed to have terminated employment in connection with or in anticipation of the consummation of the transactions contemplated by the Transaction Agreements for purposes of determining eligibility for severance benefits.  The applicable member of the Red Lion Group shall be solely responsible

 

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for all Liabilities in respect of, all costs arising out of, and all payments and benefits relating to, the termination or alleged termination of any Continuing Employee’s employment or other service that occurs as a result of, in connection with, or following the consummation of, the transactions contemplated by the Transaction Agreements, including any amounts required to be paid (including any payroll or other taxes), and the costs of providing benefits, under any applicable severance, separation, redundancy, termination or similar plan, program, practice, contract, agreement, Law or regulation (such benefits to include any medical or other welfare benefits, outplacement benefits, accrued vacation and taxes).  The Red Lion Group shall indemnify and hold harmless the Navy Group with respect to any Actions by a Continuing Employee asserting that such Continuing Employee is entitled to severance benefits under the Nabors Industries, Inc. Severance Plan.

 

2.3                               Assumption and Retention of Liabilities.

 

(a)                                 From and after the Separation Time, except as otherwise expressly provided in this Agreement, a member of the Red Lion Group shall retain, assume, perform, discharge, fulfill when due, hold the Navy Group harmless from, and to the extent applicable, comply with all of the following, in accordance with their respective terms: (i) all Red Lion Employee Benefit Plans and all Liabilities under and in connection with all Red Lion Employee Benefit Plans, in each case, arising from any Action first asserted upon or after the Separation Time; (ii) all Liabilities arising from any Action first asserted upon or after the Separation Time with respect to the employment or other service or termination of employment or other service of all Continuing Employees; (iii) all Liabilities arising from any Action first asserted upon or after the Separation Time with respect to or in connection with the engagement or termination of services by Red Lion or a Red Lion Entity of any individual who is or was an independent contractor (including any temporary service worker, consultant, freelancer, on-call worker, incidental worker, worker providing services under a retainer agreement, or other non-payroll worker of Red Lion or any Red Lion Entity, who is not an employee of Red Lion or a Red Lion Entity under applicable Laws) (for the avoidance of doubt, no such individual under this clause (iii) shall be a “Red Lion Employee” under this Agreement); (iv) all Red Lion Workers’ Compensation Claims; and (v) any other Liabilities expressly assigned to the Red Lion Group under this Agreement.

 

(b)                                 The Navy Group shall retain, assume, perform, discharge and fulfill when due, and hold the Red Lion Group harmless from: (i) all Liabilities with respect to the employment or other service or termination of employment or other services of all Continuing Employees to the extent that such Liabilities arose from an Action pending or asserted in writing before the Separation Time; (ii) all Liabilities with respect to the employment or other service or termination of employment or other service of all individuals who provide or have provided services to the Navy Group and who are not Continuing Employees (other than such claims referenced in Section 2.3(a)(iii)); (iii) all Liabilities arising under or relating to workers’ compensation claims of Red Lion Employees that are not Red Lion Workers’ Compensation Claims; and (iv) any other Liabilities expressly assigned to the Navy Group under this Agreement.

 

2.4                               Red Lion Participation in Navy Employee Benefit Plans. (a) Except as set forth on Exhibit B and in compliance with the applicable terms of the Transition Services Agreement,

 

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immediately prior to the Separation Time, (i) Red Lion and each other Red Lion Entity shall cease to be a participating employer in each Navy Employee Benefit Plan, other than any Red Lion Employee Benefit Plan, (ii) the Red Lion Employees shall cease to accrue further benefits and shall cease to be active participants in the Navy Employee Benefit Plans (other than any Red Lion Employee Benefit Plan), and (iii) the Parties shall take all necessary action before the Separation Time to effectuate the foregoing clauses (i) and (ii).  Penny and Red Lion shall indemnify and hold Navy and its Subsidiaries, other than the Red Lion Entities, harmless for any Liability arising solely from the Continuing Employees’ continued participation in any Navy Employee Benefit Plan listed on Exhibit B hereto after the Separation Time; provided, however, that Navy and its Subsidiaries shall take commercially reasonable efforts to cooperate with Penny and Red Lion in defending against any claims for any such Liability.  Except as otherwise expressly provided in this Agreement (including Section 2.2) or any other Transaction Agreement, Navy shall indemnify and hold Red Lion, each Red Lion Entity and Penny harmless for any Liability under any Navy Employee Benefit Plan with respect to service (and the termination of service) prior to the Separation Time of Red Lion Employees and of individuals described in Section 2.3(a)(iii) of this Agreement; provided, however, that such indemnification obligation shall not apply to the extent (and only to the extent) that any such Liability results from action taken by or omitted by any Red Lion Entity or Penny after the Separation Time.  For the avoidance of doubt, Navy shall not be obligated to indemnify the Red Lion Group with respect to Liabilities for compensation or benefits that accrue, are paid or are provided to Continuing Employees on or after the Separation Time even if the levels of, or eligibility for, compensation or benefits are based on service provided prior to the Separation Time.

 

(b)                     Canadian Plans.  Notwithstanding the foregoing, the Parties agree that, to the extent permitted by applicable Law and the terms of the applicable Navy Employee Benefit Plans, (i) Continuing Employees will continue to participate (at the sole cost and expense of the Red Lion Group) in the Canadian benefit plans listed on Exhibit B in compliance with the applicable terms of the Transition Services Agreement for the period specified therein (the “TSA Period”) and (ii) subject to any and all required regulatory approvals, the Navy Group will transfer all pension assets and liabilities in respect of Continuing Employees under the Pension Plan for Employees of Nabors Drilling Canada Limited (the “Canadian Defined Contribution Plan”) to a corresponding Penny Employee Benefit Plan or Red Lion Employee Benefit Plan, effective as of the Effective Time.  The Parties will work together in good faith to determine whether it is feasible for Continuing Employees who participated in the Canadian Defined Contribution Plan immediately prior to the Separation Time to continue to participate in the Canadian Defined Contribution Plan through the end of the TSA Period; provided that, to the extent such participation is feasible, Red Lion will reimburse, indemnify and hold the Navy Group harmless for all costs and Liabilities incurred by it and associated with such participation (including all incremental administrative costs).

 

2.5                   Red Lion Workers’ Compensation Claims Administration.  Subject to the Navy Group’s reasonable cooperation, the Red Lion Group will use commercially reasonable efforts to obtain the release, effective as of the Separation Time, of the Navy Group, from those letters of credit, bonds or other instruments or collateral provided by the Navy Group that are in effect as of the signing of this Agreement (collectively, “Red Lion Self-Insured Workers’ Compensation Liabilities”), in each instance with respect to the Red Lion Workers’ Compensation Claims.  From and after the Separation Time, Red Lion will be solely responsible

 

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for the administration and payment of all of the Red Lion Workers’ Compensation Claims (including the Red Lion Self-Insured Workers’ Compensation Liabilities), all of which will continue to be Liabilities of the Red Lion Group; provided, however, that the Navy Group shall provide reasonable cooperation with respect to any such administration to the extent requested by the Red Lion Group.

 

ARTICLE III
 TERMS OF EMPLOYMENT FOR EMPLOYEES

 

3.1                               Levels of Compensation and Benefits for Employees.

 

(a)                                 During the Benefit Continuation Period, the Red Lion Group shall provide to each Continuing Employee and Penny Employee either, or a combination of, as determined in the sole discretion of Red Lion and its appropriate officers, comparable types and levels of employee benefits (including salary, cash incentive compensation and health and welfare benefits) as those provided immediately prior to the Effective Time to similarly-situated employees of Penny or to similarly-situated Red Lion Employees; provided, however, that the Red Lion Group shall continue to provide the type and level of employee benefits to Continuing Employees to the extent necessary to comply with any comparable employment or similar requirement contained in the Nabors Industries, Inc. Severance Plan, as it is in effect as of the signing of this Agreement (the “Red Lion Group Severance Plan”); and provided further, however, that nothing in this Section 3.1(a) shall restrict or prevent the Red Lion Group from taking any actions during the Benefit Continuation Period with respect to the Continuing Employees that would result in the payment of severance benefits pursuant to Section 3.1(b), so long as such actions do not result in any Liability to the Navy Group.

 

(b)                                 Immediately following the Effective Time, each Continuing Employee and each Penny Employee shall be eligible to receive severance benefits from the Red Lion Group on the terms and subject to the conditions of the Red Lion Group Severance Plan.  The Red Lion Group shall take into account for purposes of calculating (i) a Continuing Employee’s severance benefits under the Red Lion Group Severance Plan, such Continuing Employee’s service with Navy and its Affiliates (and their respective predecessors) prior to the Separation Time, and with Red Lion and its Affiliates from and after the Separation Time, as service for the Red Lion Group and (ii) a Penny Employee’s severance benefits under the Red Lion Group Severance Plan, such Penny Employee’s service with Penny and its Affiliates (and their respective predecessors) prior to the Effective Time, and with Red Lion and its Affiliates from and after the Effective Time, as service for the Red Lion Group.

 

3.2                               Service Credit and Welfare Plans.

 

(a)                                 For all purposes (including vesting, eligibility to participate and level of benefits) under the employee benefit plans of the Red Lion Group providing benefits to any Continuing Employees or Penny Employees from or after the Effective Time (the “New Plans”), Red Lion shall take commercially reasonable efforts to provide, subject to the approval of any applicable insurance carrier, that each Continuing Employee and Penny Employee shall be credited with his or her years of service with Navy, Red Lion, Penny, their respective Affiliates

 

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and each of their respective predecessors, as applicable, prior to the Effective Time, to the same extent as such Continuing Employee or Penny Employee, as applicable, was entitled, before the Effective Time, to credit for such service under any similar employee benefit plan in which such Continuing Employee or Penny Employee, as applicable, participated or was eligible to participate immediately prior to the Effective Time; provided that the foregoing shall not apply with respect to benefit accrual under any defined benefit pension plan or to the extent that its application would result in a duplication of benefits with respect to the same period of service.

 

(b)                                 In addition, and without limiting the generality of the foregoing, Red Lion shall take commercially reasonable efforts to cause, subject to the approval of any applicable insurance carrier, (i) each Continuing Employee and Penny Employee to be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such a New Plan is comparable to the applicable employee benefit plan in which such Continuing Employee or Penny Employee participated immediately prior to the Effective Time, and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Continuing Employee or Penny Employee, all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, unless and to the extent the individual, immediately prior to entry in the New Plans, was subject to such conditions under the applicable employee benefit plan in which such Continuing Employee or Penny Employee participated immediately prior to the Effective Time.

 

3.3                               Flexible Spending Accounts.  Effective as of the Effective Time: (a) the account balances under health care flexible spending accounts and under dependent care spending accounts (whether positive or negative, the “Transferred Account Balances”) under Navy’s health care flexible spending and dependent care spending plan(s) (collectively, the “Navy Flex Plan”) of the Continuing Employees who are participants in the Navy Flex Plan (the “Covered Flex Plan Employees”) shall be transferred to one or more comparable plans of the Red Lion Group (collectively, the “Red Lion Group Flex Plan”); (b) the elections, contribution levels and coverage levels of the Covered Flex Plan Employees shall apply under the Red Lion Group Flex Plan in the same manner as under the Navy Flex Plan; and (c) the Covered Flex Plan Employees shall be reimbursed from the Red Lion Group Flex Plan for claims incurred at any time during the plan year of the Navy Flex Plan in which the Effective Time occurs that are submitted to the Red Lion Group Flex Plan from or after the Effective Time on the same basis and the same terms and conditions as under the Navy Flex Plan.  As soon as practicable after the Effective Time, and in any event within 10 business days after the amount of the Transferred Account Balances is determined, the Navy Group shall pay the Red Lion Group the net aggregate amount of the Transferred Account Balances, if such amount is positive, or the Red Lion Group shall pay the Navy Group the net aggregate amount of the Transferred Account Balances, if such amount is negative.

 

3.4                               Earned Vacation.  Except for such cases in which Navy or its Affiliate is required under applicable Law to pay a Continuing Employee an amount in respect of such Continuing Employee’s accrued vacation as a result of the Red Lion Reorganization, the Red Lion Group shall honor all unused vacation of each Continuing Employee and Penny Employee during the calendar year in which the Separation Time occurs.  Thereafter, such Continuing Employees and Penny Employees shall be subject to, and commence to accrue benefits under, the vacation, sick

 

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leave and other personal or paid time off policies of the Red Lion Group applicable to the respective Continuing Employee or Penny Employee.

 

ARTICLE IV
 BONUS AWARDS FOR RED LION EMPLOYEES

 

4.1                               Bonus Awards.  The Red Lion Entity employing the applicable Continuing Employee shall be responsible for determining and paying all bonus awards to the Continuing Employee in respect of all applicable performance periods during which the Separation Time occurs and all performance periods thereafter, in each case under and in accordance with the terms of the Red Lion Employee Benefit Plans and the Nabors Annual Incentive Plan, as applicable.

 

ARTICLE V
 COBRA, HIPAA, WARN

 

5.1                               COBRA and HIPAA.  The Red Lion Group will assume and be responsible for, and shall indemnify and hold harmless the Navy Group for, all Liabilities resulting from any Actions asserted upon or after the Separation Time with respect to Continuing Employees and their eligible dependents, in respect of health insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the Health Insurance Portability and Accountability Act of 1996, Sections 601, et seq. and Sections 701, et seq. of ERISA, Section 4980B and Sections 9801, et seq. of the Code and applicable state or similar Laws.

 

5.2                               WARN Act.  Effective from and after the Separation Time, the Red Lion Group shall assume Liability for, and shall indemnify and hold harmless the Navy Group with respect to, any Liabilities incurred by the Navy Group pursuant to the Worker Adjustment and Retraining Notification Act and any similar Law (collectively, the “WARN Act”) resulting from the termination of employment of any Continuing Employee by any member of the Red Lion Group upon or after the Separation Time.  The Navy Group shall assume Liability for, and shall indemnify and hold harmless the Red Lion Group with respect to, any Liabilities incurred by the Red Lion Group pursuant to the WARN Act resulting from the termination of employment of any Red Lion Employee by any member of the Red Lion Group prior to the Separation Time and the termination of employment of any other current or former employee or service provider of the Navy Group, in each case who is not a Continuing Employee.

 

ARTICLE VI
 PENSION PLANS AND DEFERRED COMPENSATION PLANS

 

6.1                               Navy U.S. DB Plan. From and after the Effective Time, the Navy Group shall retain all Liabilities under Navy’s Pool Company Retirement Income Plan (the “Navy U.S. DB Plan”) and all Assets held under the trust(s) associated with the Navy U.S. DB Plan (collectively, the “Navy U.S. DB Plan Trust”).  The Navy Group shall indemnify and hold harmless the Red Lion Group with respect to all Liabilities under, relating to, and in connection with the Navy U.S. DB Plan and the Navy U.S. DB Plan Trust.

 

6.2                               401(k) Plan. The Red Lion Group will cause a cash or deferred arrangement intended to qualify under Section 401(a) of the Code (the “Red Lion Group 401(k) Plan”) to

 

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accept rollovers (including rollovers of loans) from and after the Effective Time from the Nabors Industries, Inc. Retirement Savings Plan (the “Navy 401(k) Plan”) with respect to the Continuing Employees.  For purposes of this Section 6.2, a member of the Red Lion Group shall assume the KVS 401(k) Plan and all Assets and Liabilities under and in connection with, and shall indemnify and hold the Navy Group harmless from all Liabilities arising from any Action first asserted upon or after the Separation Time with respect to, the KVS 401(k) Plan and the trust(s) thereunder to the extent the KVS 401(k) Plan has not merged with and into the Navy 401(k) Plan prior to the Separation Time.

 

6.3                               Nonqualified Deferred Compensation.

 

(a)                                 Navy shall retain, or cause its Subsidiaries (other than any Red Lion Entities) to retain, all Assets and all Liabilities arising out of or relating to the Nabors Industries, Inc. Deferred Compensation Plan and the Nabors Industries, Inc. Executive Deferred Compensation Plan (collectively, the “Navy Nonqualified Plans”).

 

(b)                                 As soon as reasonably practicable following the Separation Time, Navy shall provide to Red Lion a list of all Continuing Employees who are participants in the Navy Nonqualified Plans (the “Nonqualified Plan Participants”).  Following the Effective Time, Red Lion shall provide, or shall cause to be provided, to Navy notice of the termination of employment of any Nonqualified Plan Participant upon or as soon as practicable following any such termination.

 

ARTICLE VII
 GENERAL AND ADMINISTRATIVE

 

7.1                               Reasonable Efforts/Cooperation.  Each of the Parties hereto will use its commercially reasonable efforts to promptly take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws to consummate the transactions contemplated by this Agreement.  Each of the Parties hereto shall reasonably cooperate with respect to any issue relating to the transactions contemplated by this Agreement for which the other Party seeks a determination letter or private letter ruling from the Internal Revenue Service, an advisory opinion from the Department of Labor or any other filing (including securities filings (remedial or otherwise)), consent or approval with respect to or by a governmental agency or authority in any jurisdiction in the United States or abroad.

 

7.2                               No Third-Party Beneficiaries.  This Agreement is solely for the benefit of the Parties and is not intended to confer upon any other Persons any rights or remedies hereunder.  Nothing in this Agreement shall preclude the Navy Group, the Red Lion Group or any of their respective Affiliates, at any time, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any employee benefit plan, program, policy, practice, agreement or arrangement, any benefit thereunder or any trust, insurance policy or funding vehicle related thereto.  Nothing contained in this Agreement shall (a) constitute or be deemed to be an amendment to any Navy Employee Benefit Plan, Penny Employee Benefit Plan or Red Lion Employee Benefit Plan or any other compensation or benefit plan, program, practice, policy, agreement or arrangement of Penny, Navy, Red Lion, the Red Lion Group or any of their respective Affiliates; or (b) limit the right of Red Lion, Navy, Penny or any of their

 

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respective Affiliates to terminate the employment or service of any employee or other service provider at any time.

 

ARTICLE VIII
 MISCELLANEOUS

 

8.1                               Effect if Separation Time or Effective Time Does Not Occur.  If the Separation Agreement is terminated prior to the Separation Time or the Effective Time, then this Agreement shall terminate and all actions and events that are, under this Agreement, to be taken or occur effective immediately prior to or as of the Separation Time or the Effective Time, as applicable, or otherwise in connection with the transactions contemplated by the Transaction Agreements, shall not be taken or occur except to the extent specifically agreed by Navy and Red Lion and, respecting Penny, by Penny.

 

8.2                               Relationship of Parties.  Nothing in this Agreement shall be deemed or construed by the Parties or any third party as creating the relationship of principal and agent, partnership or joint venture between the Parties, it being understood and agreed that no provision contained herein, and no act of the Parties, shall be deemed to create any relationship between the Parties other than the relationship set forth herein.

 

8.3                               Affiliates.  Each of Navy, Red Lion and Penny shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by one of Navy’s Subsidiaries (other than the Red Lion Group) or a Red Lion Entity or one of Penny’s Subsidiaries, respectively.

 

8.4                               Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given to a Party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile with confirmation of transmission by the transmitting equipment; or (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses and facsimile numbers and marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number or person as a Party may designate by notice to the other Parties):

 

if to Navy or, prior to the Effective Time, Red Lion:

 

Nabors Industries Ltd

Crown House

Second Floor

4 Par-la-Ville Road

Hamilton, HM 08

Bermuda

Attention:                                         Corporate Secretary, with a copy to Laura Doerre

 

with a copy (which shall not constitute notice) to:

 

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Milbank, Tweed, Hadley & McCloy LLP
 One Chase Manhattan Plaza
 New York, New York 10005
 Attention:                                         Charles J. Conroy

Scott W. Golenbock
 Facsimile:                                         (212) 530-5219

 

if to Penny:

 

C&J Energy Services, Inc.

3990 Rogerdale

Houston, TX 77042

Attention: Theodore Moore

Facsimile: (713) 325-5920

 

with a copy (which shall not constitute notice)  to:

 

Vinson & Elkins L.L.P.
 1001 Fannin, Suite 2500
 Houston, Texas 77002
 Attention:                                         Jeffery B. Floyd

Stephen M. Gill
 Facsimile:                                         (713) 615-5956

 

if to a member of the Red Lion Group after the Effective Time:

 

C&J Energy Services, Inc.

3990 Rogerdale

Houston, TX 77042

Attention: Theodore Moore

Facsimile: (713) 325-5920

 

with a copy (which shall not constitute notice) to:

 

Vinson & Elkins L.L.P.
 1001 Fannin, Suite 2500
 Houston, Texas 77002
 Attention:                                         Jeffery B. Floyd

Stephen M. Gill
 Facsimile:                                         (713) 615-5956

 

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8.5                               Incorporation of Separation Agreement Provisions.  The following provisions of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein mutatis mutandis (references in this Section 8.5 to an “Article” or “Section” shall mean Articles or Sections of the Separation Agreement, and references in the material incorporated herein by reference shall be references to the Separation Agreement):  Article III (relating to Mutual Releases and Indemnification); Section 4.1 (relating to Further Assurances); Section 4.2 (relating to Agreement for Exchange of Information); Section 4.3 (relating to Privileged Matters); and Article V (relating to Miscellaneous).  Notwithstanding the foregoing, in the event of any conflict between the terms and conditions of this Agreement and the Separation Agreement, the provisions of this Agreement shall control.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.

 

	
 
    	
 
    
	
 
    	
NABORS INDUSTRIES LTD.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NABORS RED LION LIMITED
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
C&J ENERGY SERVICES, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURE PAGE TO EMPLOYEE BENEFITS AGREEMENT]

 

13Exhibit 10.5

 

EXECUTION VERSION

 

SUPPORT AGREEMENT

 

SUPPORT AGREEMENT (this “Agreement”) dated as of June 25 , 2014, among Nabors Industries Ltd., a Bermuda exempted company (“Navy”), and Nabors Red Lion Limited, a Bermuda exempted company (“Red Lion”), on the one hand, and Joshua E. Comstock, the Joshua E. Comstock Trust and JRC Investments, LLC (collectively, the “Stockholders”), on the other hand.

 

WHEREAS, each Stockholder is a stockholder of C&J Energy Services, Inc., a Delaware corporation (“Penny”);

 

WHEREAS, as of the date hereof, the Stockholders are collectively the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of 5,444,280 Penny Common Stock (the “Original Shares” and, together with any additional shares of Penny Common Stock issued in the manner described in Section 1.5 hereof, the “Subject Shares”);

 

WHEREAS, contemporaneously with the execution and delivery of this Agreement, Navy, Red Lion, and Penny have entered into an Agreement and Plan of Merger (as amended, supplemented, restated or otherwise modified from time to time, the “Merger Agreement”), providing for, among other things, the merger of a direct wholly owned Subsidiary of Red Lion with and into Penny, with Penny continuing as the surviving corporation in such merger (the “Merger”);

 

WHEREAS, in order to induce Navy, Red Lion and Penny to enter into the Merger Agreement, each Stockholder has agreed to enter into this Agreement and abide by the covenants and obligations with respect to the Subject Shares set forth herein; and

 

WHEREAS, capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration given to each party hereto, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

AGREEMENT TO VOTE

 

Section 1.1                              Voting of Subject Shares; Irrevocable Proxy.

 

(a)                       Each Stockholder agrees to vote (or cause the holder of record on any applicable record date to vote), in person or by proxy, all of the Subject Shares in connection with any meeting of the stockholders of Penny (including any adjournment or postponement thereof) or any action by written consent in lieu of a meeting of stockholders of Penny (i) in favor of the approval of the Merger Agreement and the approval of any other matter that is required to be approved by the stockholders of Penny in order to effect the transactions

 

 

contemplated by the Merger Agreement (including any proposal to adjourn or postpone a meeting of the stockholders of Penny to a later date if there are not sufficient votes to approve the Merger Agreement on the date on which the meeting is held); and (ii) against (A) any Acquisition Proposal or any agreement or arrangement constituting or related to an Acquisition Proposal, (B) any action that would result in a liquidation, dissolution, recapitalization, extraordinary dividend or other significant corporate reorganization of Penny; or (C) any action that would reasonably be expected to prevent, interfere with or delay the consummation of the Merger and the other transactions contemplated by the Merger Agreement or that would otherwise be inconsistent with the Merger and the other transactions contemplated by the Merger Agreement, and in connection therewith, each Stockholder agrees to execute any documents that are necessary or appropriate in order to effectuate the foregoing.  Each Stockholder shall (or shall cause the holder of record on any applicable record date to) be present (in person or by proxy) at any meeting of stockholders of Penny (including any adjournment or postponement thereof) called to approve the Merger Agreement or otherwise cause the Subject Shares to be counted as present thereat for purposes of establishing a quorum.

 

(b)                       In furtherance of the foregoing, each Stockholder hereby irrevocably grants to, and appoints, until the termination of this Agreement in accordance with Section 2.1, Navy, each of Navy’s officers and any person or persons designated in writing by Navy, and each of them individually, as such Stockholder’s proxy and attorney-in-fact (with full power of substitution and resubstitution), for and in the name, place and stead of such Stockholder, to vote or grant a written consent in respect of all of such Stockholder’s Subject Shares, or execute and deliver a proxy to vote or grant a written consent in respect of the Subject Shares, on the matters and in the manner specified in Section 1.1(a) of this Agreement.  Each Stockholder hereby affirms that such irrevocable proxy is given in connection with, and in consideration of, the execution of the Merger Agreement by Navy, Red Lion and Penny, and that such irrevocable proxy is given to secure the performance of the duties of such Stockholder under this Agreement.  Each Stockholder hereby further affirms that such proxy is irrevocable and is coupled with an interest sufficient in law to support an irrevocable power and may under no circumstances be revoked.  Such proxy is executed and intended to be irrevocable in accordance with the provisions of Section 212 of the DGCL until the termination of this Agreement in accordance with Section 2.1.  Each Stockholder shall execute any further agreement or form reasonably necessary or appropriate to confirm and effectuate the grant of the proxy contemplated herein.  Each Stockholder hereby revokes (or causes to be revoked) any and all previous proxies, powers of attorney, instructions or other requests with respect to such Stockholder’s Subject Shares.  Navy may terminate this proxy with respect to each Stockholder at any time at its sole election by written notice provided to such Stockholder.

 

Section 1.2                              No Transfers; No Inconsistent Arrangements.  Except as provided hereunder, each Stockholder agrees not to, directly or indirectly, (i) transfer (which term shall include any sale, assignment, gift, pledge, hypothecation or other disposition), or consent to, agree to or permit any such transfer of, any or all of the Subject Shares or any interest therein (except for a transfer for estate or tax planning purposes, for charitable purposes or as charitable gifts or donations where the transferee or third party agrees in writing to be bound by the terms hereof), or create or permit to exist any Liens, proxies, voting trusts or agreements, options, rights, understandings or arrangements or any other encumbrances whatsoever on title, transfer,

 

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or exercise of any rights of a stockholder in respect of such Subject Shares (collectively, “Encumbrances”) that would prevent such Stockholder from voting the Subject Shares in accordance with this Agreement or from complying with its other obligations under this Agreement, other than any restrictions imposed by applicable law on any such Subject Shares; (ii) enter into any contract, option or other agreement, arrangement or understanding inconsistent with the terms of this Agreement with respect to any transfer of Subject Shares or any interest therein; (iii) grant or permit the grant of any proxy, power of attorney or other authorization in or with respect to the Subject Shares relating to the subject matter hereof; (iv) deposit or permit the deposit of the Subject Shares into a voting trust or enter into a voting agreement or arrangement with respect to the Subject Shares; or (v) take or permit any other action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the transactions contemplated hereby (any of the actions set forth in clauses (i) through (v) above, and any conversion, exchange or other disposition of the Subject Shares in a transaction related to an Acquisition Proposal being referred to in this Agreement as a “Transfer”).  Any action taken in violation of the foregoing sentence shall be null and void ab initio.  To the extent the a Stockholder’s Subject Shares are represented by certificates, such Stockholder shall make available to Penny such certificates in order for Penny to mark such certificates with legends required by the DGCL regarding the foregoing Transfer restrictions.  If any involuntary Transfer of any of the Subject Shares shall occur, the transferee (which term, as used herein, shall include the initial transferee and any and all subsequent transferees of the initial transferee) shall take and hold such Subject Shares subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect until the valid termination of this Agreement.

 

Section 1.3                              Non-Solicitation.  Without limitation to Section 6.4 of the Merger Agreement, each Stockholder agrees not to, and to direct and use reasonable best efforts to cause its Representatives not to, directly or indirectly, initiate, solicit or knowingly encourage (including by way of furnishing confidential information) any third party to make an Acquisition Proposal or assist any third party in preparing or soliciting an offer relating in any way to an Acquisition Proposal; provided, however, that consistent with the provisions of Section 2.12 below, nothing herein shall limit or prohibit any Stockholder or any of its Representatives, in his or her capacity as an officer or director of Penny, from taking any action or failing to take any action in such capacity.  Each Stockholder shall, and shall direct and use reasonable best efforts to cause its Representatives to, immediately cease and cause to be terminated all existing discussions or negotiations with any person conducted heretofore with respect to any Acquisition Proposal.

 

Section 1.4                              Documentation and Information.  Each Stockholder (i) consents to and authorizes the publication and disclosure by Navy, Red Lion or Penny of Stockholder’s identity and holding of Subject Shares, and the nature of its commitments, arrangements and understandings under this Agreement (including, for the avoidance of doubt, the disclosure of this Agreement), in any press release, the Proxy Statement, the Form S-4 and any other disclosure document required in connection with the Merger Agreement, the Merger and any transactions contemplated by the Merger Agreement, and (ii) agrees to give to Navy as promptly as practicable any information related to the foregoing that Navy may reasonably require for the preparation of any such disclosure documents.  Each Stockholder agrees to notify Navy as

 

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promptly as practicable of any required corrections with respect to any written information supplied by such Stockholder specifically for use in any such disclosure document, if and to the extent such Stockholder becomes aware that any such information shall have become false or misleading in any material respect.

 

Section 1.5                              Changes to Subject Shares.  Each Stockholder agrees that all shares of Penny Common Stock that such Stockholder purchases, acquires the right to vote or otherwise acquires beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of after the execution of this Agreement, including shares issued upon the exercise of Penny Share Units or Penny Stock Options, shall be subject to the terms of this Agreement and shall constitute “Subject Shares” for all purposes of this Agreement.  In the event of any stock dividend or distribution, or any change to the Subject Shares by reason of any stock dividend or distribution, split-up, recapitalization, combination, exchange of shares or any other similar transaction, the term “Subject Shares” as used in this Agreement shall be deemed to refer to and include the Subject Shares and all such stock dividends and distributions and any securities into which or for which any or all of the Subject Shares may be changed or exchanged or which are received in the relevant transaction.  Each Stockholder hereby agrees, while this Agreement is in effect, to notify Navy promptly in writing of the number and description of any additional Subject Shares of which such Stockholder acquires beneficial ownership or ownership of record.

 

Section 1.6                              Representations and Warranties.  Each Stockholder represents and warrants to Navy and Red Lion as follows:

 

(a)                       Such Stockholder (i) is the sole beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of, and has, and at the time of the Penny Stockholders Meeting will have, good title to, the such Stockholder’s Subject Shares, free and clear of any and all Encumbrances except for Encumbrances arising (A) hereunder, (B) from the status of any Subject Shares as Restricted Penny Shares or (C) any restrictions on transfer imposed by applicable federal or state securities laws; (ii) does not own, of record or beneficially, any shares of capital stock of Penny (or rights to acquire any such shares) other than the Subject Shares and shares underlying Penny Share Units or Penny Stock Options; and (iii) has the sole right to vote and dispose of, and holds sole power to issue instructions with respect to, the matters set forth in this Agreement with no material limitations, qualifications or other restrictions on such rights, subject to applicable federal or state securities laws and the terms of this Agreement and except for any such restrictions arising from the qualification of any Subject Shares as Restricted Penny Shares.  As of the date hereof, the Stockholders is the beneficial owners (within the meaning of Rule 13d-3 under the Exchange Act) of 5,444,280 Subject Shares, and do not own any other shares of Penny Common Stock.

 

(b)                       This Agreement has been duly and validly executed and delivered by Stockholder and, assuming this Agreement constitutes a valid and binding obligation of each of Navy and Red Lion, constitutes a legal, valid and binding agreement of each Stockholder enforceable against each Stockholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equitable principles.

 

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(c)                        The execution, delivery and performance by each Stockholder of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) conflict with, or result in the breach or termination of or constitute a default (with or without the giving of notice or the lapse of time or both) under any note, bond, mortgage, indenture, contract, agreement, lease, license, permit or other instrument or obligation of any kind to which such Stockholder is a party or by which the Subject Shares are bound; or (ii) violate, or require any consent, approval, or notice under any provision of any judgment, order or decree or any federal, state, local or foreign statute or Law applicable to Stockholder or any of the Subject Shares.

 

(d)                       The execution and delivery of this Agreement by each Stockholder does not, and the performance by each Stockholder of its obligations under this Agreement and the consummation by it of the transactions contemplated hereby will not, require any Stockholder to obtain any consent, approval, authorization or permit of, or to make any filing with or notification to, any Governmental Entity, other than the filings of any reports (or amendments thereto) with the SEC.

 

(e)                        Each Stockholder understands and acknowledges that each of the parties to the Merger Agreement are entering into the Merger Agreement in reliance upon the execution and delivery of this Agreement by such Stockholder and the representations, warranties and covenants of such Stockholder contained herein. Each Stockholder understands and acknowledges that the Merger Agreement governs the terms of the Merger and the other transactions contemplated thereby.

 

ARTICLE II

 

MISCELLANEOUS

 

Section 2.1                              Termination.  This Agreement shall terminate in its entirety upon the earliest to occur of (i) the termination of the Merger Agreement in accordance with its terms, (ii) the Effective Time, (iii) any reduction of the Merger Consideration or change in the form of the Merger Consideration, or any (iv) Change in Penny Recommendation; provided, however, that the provisions of this Article II (Miscellaneous) shall survive any termination of this Agreement.  In the event of termination of this Agreement, this Agreement shall become void and of no effect with no liability on the part of any party hereto; provided, however, that the termination of this Agreement shall not prevent any party hereto from seeking any remedies (at law or in equity) against any other party hereto for such party’s breach of any of the terms of this Agreement occurring prior to such termination.

 

Section 2.2                              Notices.  All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

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(i) if to the Stockholders to:

 

Joshua E. Comstock

c/o C&J Energy Services, Inc.

3990 Rogerdale

Houston, TX 77042

 

and

 

(ii) if to Navy and Red Lion, in accordance with Section 9.2 of the Merger Agreement, or to such other persons, addresses or facsimile numbers as may be designated in writing to each other party hereto by the person entitled to receive such communication as provided above.

 

Section 2.3                              Amendments; Waivers; Extensions.

 

(a)                       This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties.

 

(b)                       At any time prior to the Effective Time, the parties may, to the extent permitted by applicable law, (i) extend the time for the performance of any of the obligations or other acts of the other party, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements or conditions contained herein.  Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party.  The failure of a party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.  No single or partial exercise of any right, remedy, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  Any waiver shall be effective only in the specific instance and for the specific purpose for which given and shall not constitute a waiver to any subsequent or other exercise of any right, remedy, power or privilege hereunder.

 

Section 2.4                              Expenses.  All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such costs and expenses, whether or not the transactions contemplated by this Agreement or the Merger Agreement are consummated; provided, however, that the fees of counsel for the Stockholders in connection with the negotiation and documentation of this Agreement will be paid by Penny on behalf of the Stockholders.

 

Section 2.5                              Binding Effect; Benefit; Assignment.  Neither this Agreement nor any of the rights, interests or obligations of the parties hereunder shall be assigned by either party (whether by operation of law or otherwise) without the prior written consent of the other party, and any attempt to make any such assignment without such consent shall be null and void.  Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

 

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Section 2.6                              Governing Law.  This Agreement and all disputes or controversies arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of law principles of the State of New York (except that (a) all provisions of this Agreement relating to the internal corporate governance of Penny or Merger Sub or to which Delaware law otherwise applies by reason of the internal affairs doctrine shall be governed and construed in accordance with the internal laws of the State of Delaware , and (b) all matters relating to the legal duties of the Board of Directors of Red Lion, the Board of Directors of Navy and their respective members shall be governed by the internal laws of Bermuda).

 

Section 2.7                              Counterparts.  This Agreement may be executed in counterparts (including by electronic means), each of which shall be considered one and the same agreement and this Agreement shall become effective when a counterpart signed by each party shall be delivered to the other party, it being understood that both parties need not sign the same counterpart.  Delivery of an executed signature page of this Agreement by facsimile or other customary means of electronic transmission (e.g., “pdf”) shall be effective as delivery of a manually executed counterpart hereof.

 

Section 2.8                              Venue; Waiver of Jury Trial.

 

(a)                       Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America sitting in the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby for any reason other than the failure to serve process in accordance with this Section 2.8, and irrevocably waive the defense of an inconvenient forum or an improper venue to the maintenance of any such action or proceeding.  Any service of process to be made in such action or proceeding may be made by delivery of process in accordance with the notice provisions contained in Section 2.2.  The consents to jurisdiction set forth in this Section 2.8 shall not constitute general consents to service of process in the State of New York and shall have no effect for any purpose except as provided in this Section 2.8 and shall not be deemed to confer rights on any person other than the parties.  The parties agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.  In addition, each of the parties hereto agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and irrevocably waives any and all right to trial by jury with respect to any action related to or arising out of this Agreement.

 

(b)                       EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING DIRECTLY INVOLVING ANY MATTERS (WHETHER SOUNDING IN TORT,

 

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CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 2.8.

 

Section 2.9                              Entire Agreement; Third Party Beneficiaries.  This Agreement (including the documents and the instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and (b) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

 

Section 2.10                       Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability and shall not render invalid or unenforceable the remaining terms and provisions of this Agreement or affect the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.  If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

 

Section 2.11                       Enforcement.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise breached.  It is accordingly agreed that, in the event of any breach or threatened breach by any other party of any covenant or obligation contained in this Agreement, the non-breach party shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to seek and obtain (on behalf of themselves and the third-party beneficiaries of this Agreement) (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an Injunction, restraining such breach or threatened breach.  No party or any other person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 2.11, and each party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

 

Section 2.12                       Stockholder Capacity.  No person executing this Agreement who is or becomes during the term hereof a director or officer of Penny shall be deemed to make any agreement or understanding herein in his or her capacity as such director or officer.  Each Stockholder signs solely in his, her or its capacity as the beneficial owner of the Subject Shares and nothing herein shall limit or prohibit any Stockholder or any of its Representatives, in his or

 

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her capacity as an officer or director of Penny, from taking any action or failing to take any action in such capacity.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the day and year first above written.

 

 

	
 
    	
NABORS INDUSTRIES LTD.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark D. Andrews
    
	
 
    	
 
    	
Name:
    	
Mark D. Andrews
    
	
 
    	
 
    	
Title:
    	
Corporate   Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NABORS RED LION LIMITED
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark D. Andrews
    
	
 
    	
 
    	
Name:
    	
Mark D. Andrews
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to Comstock Support Agreement]

 

 

 

	
 
    	
JOSHUA E. COMSTOCK:
    
	
 
    	
 
    
	
 
    	
/s/   Joshua E. Comstock
    
	
 
    	
Joshua E. Comstock
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JOSHUA E. COMSTOCK TRUST:
    
	
 
    	
 
    
	
 
    	
/s/   Joshua E. Comstock
    
	
 
    	
Joshua E. Comstock, Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JRC INVESTMENTS, LLC:
    
	
 
    	
 
    
	
 
    	
/s/   Joshua E. Comstock
    
	
 
    	
Joshua E. Comstock, Sole Member
    

 

[Signature Page to Comstock Support Agreement]

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