EXHIBIT 10.13
MEMBERSHIP INTEREST ASSIGNMENT AGREEMENT
This Membership Interest Assignment
Agreement (“ Assignment ”) is entered into this
30th day of March, 2006 (“ Execution Date ”),
but to be effective as between the parties as of January 1,
2006 (“ Effective Date ”), by and between
Continental Resources, Inc., an Oklahoma corporation (“
Buyer ”), and the Harold Hamm Revocable Inter-Vivos
Trust dated April 23, 1984, Harold Hamm, Trustee; the Harold
Hamm HJ Trust, Bert Mackie, Trustee; and the Harold Hamm DST Trust,
Bert Mackie, Trustee (individually, the “ Seller
” and collectively, the “ Sellers ”), the
record and beneficial owners of all of the issued and outstanding
membership interest (the “ Interests ”) of
Banner Pipeline Company, LLC, an Oklahoma limited liability company
(the “Company”), and Harold Hamm, a lender to the
Company and the Seller’s (“ Lender ”) with
reference to the following circumstances:
A. Sellers own the Interests, which
comprises all of the issued and outstanding membership interests of
the Company;
B. Sellers desire to sell the
Interests to Buyer and Buyer desires to purchase the Interests from
Sellers; and
C. Immediately prior to the
transactions contemplated by this Assignment, the Company has
transferred and assigned to Banner Transportation Company, LLC
(“ Newco ”) all of its assets and liabilities
relating to the gas gathering system under construction in Richland
County, Montana (“ Gathering Assets ”), leaving
Company with only the assets and liabilities related to its crude
oil marketing business.
In consideration of the premises and the mutual
promises contained herein, the parties agree as follows:
1. Assignment and Loan
Repayment . As of the Effective Date, Sellers hereby assign and
transfer to Buyer, in exchange for the aggregate payment of
$5,272,513.94 (the “ Purchase Price ”), receipt
of which is hereby acknowledged, all of Sellers’ right, title
and interest in the Interests. The Purchase Price is calculated as
follows:
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the total
members capital of the Company as of the Effective Date
($10,483,658.60),
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less the
distribution of the Gathering Assets, ($4,043,905.01),
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less the amount
due from Newco (on behalf of Sellers) to Company for Gathering
Assets costs incurred by the Company between the Effective Date and
the Execution Date ($1,167,239.65).
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Net Purchase
Price; $5,272,513.94
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The amount of the Purchase Price for each Seller
shall be equal to a percentage of the Purchase Price equal to their
Percentage ownership of the Company as set forth on the signature
page. Each Seller hereby authorizes the Buyer to pay the Purchase
Price to Lender to reimburse him for prior advances made to each
Seller to fund the Sellers’ capital contributions (or a
portion thereof). In addition, Buyer shall, on behalf of the
Company, simultaneously pay to Lender $3,500,000, plus any accrued
interest ($50,054.79), representing the amount of a loan
from
Lender to the Company and Lender hereby
acknowledges receipt of such amount and agrees that the Company
shall have no further liability with respect to such
loan.
Total proceeds paid to Lender and Sellers are
equal to the Purchase Price ($5,272,513.94) plus loan proceeds
($3,550, 054.79) or $8,822,568.73.
2. Representations and Warranties
of Sellers . Each Seller hereby represents and warrants to
Buyer that:
2.1 No Violation or Conflict by
Seller; Consents . The execution, delivery and performance of
this Assignment do not and will not (a) conflict with or
violate any law, judgment, order or decree binding on such Seller
or (b) constitute a violation or breach of any contract or
agreement to which such Seller is a party or by which it is bound.
No notice to, filing or registration with, or authorization,
consent or approval of, any person is necessary or is required to
be made or obtained by such Seller in connection with the
execution, delivery and performance by such Seller of this
Assignment.
2.2 Title to Interests .
Seller owns of record and beneficially good, valid and marketable
title to the Interests set forth opposite its name on the signature
page, and Buyer will have title to the Interests free and clear of
any and all mortgages, liens, encumbrances, charges, claims,
restrictions, pledges, security interests or impositions, good and
valid title to the Interests, free and clear of all mortgages,
liens, encumbrances, charges, claims, restrictions, pledges,
security interests or impositions.
2.3 Organization and Authority of
the Company . The Company is duly organized, validly existing
and in good standing under the laws of the State of Oklahoma. The
Company has full power to carry on its business as it is now being
conducted and to own, operate and hold under lease its assets and
properties as, and in the places where, such properties and assets
now are owned, operated or held. The Company is duly qualified as a
foreign entity to do business, and is in good standing, in each
jurisdiction where the failure to be so qualified would have a
material adverse effect.
2.4 Capitalization . The
Interests represents all of the issued and outstanding membership
interests of the Company and were not issued in violation of any
preemptive or other right. There are no options, warrants or other
rights to subscribe for or purchase any membership interest of the
Company or securities convertible into or exchangeable for, or
which otherwise confer on the holder any right to acquire, any
membership interest of the Company, nor is the Company or any
Seller committed to issue any such option, warrant or other
right.
2.5 No Violation or Conflict by
the Company; Consents . The execution, delivery and performance
of this Assignment do not and will not (a) conflict with or
violate any law, judgment, order or decree binding on the Company
or the Articles of Organization or Operating Agreement of the
Company or (b) constitute a violation or breach of any
contract, or result in any party having the right to cancel,
terminate, modify or exercise any option under any of the contracts
to which the Company is a party or otherwise bound. No notice to,
filing or registration with, or authorization, consent or approval
of,
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any person is necessary or is
required to be made or obtained by the Company in connection with
the consummation of the transactions contemplated in this
Assignment.
2.6 Marketing Activities .
The Company has, prior to the Effective Date, purchased crude oil
from the Buyer and resold it to unrelated third parties.
3. Representations and Warranties
of Buyer . Buyer hereby represents and warrants to Sellers
that:
3.1 Organization . Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Oklahoma and has full power to enter
into this Assignment and to perform its obligations
hereunder.
3.2 Authorization . The
execution, delivery and performance by Buyer of this Assignment,
and of all of the documents and instruments required hereby from
Buyer, are within the power of Buyer and have been duly authorized
by all necessary action of Buyer.
3.3 No Violation or Conflict by
Buyer . The execution, delivery and performance of this
Assignment by Buyer do not and will not (a) conflict with or
violate any law, judgment, order or decree binding on Buyer or the
Certificate of Incorporation or Bylaws of Buyer or
(b) constitute a violation or breach of any contract or
agreement to which Buyer is a party or by which it is bound. No
notice to, filing or registration with, or authorization, consent
or approval of, any person is necessary or is required to be made
or obtained by Buyer in connection with the execution and delivery
and performance by Buyer of this Assignment.
4. Indemnities And Additional
Covenants
4.1 Sellers’ Indemnity
.
(a) Each Seller hereby, jointly and
severably, indemnifies and holds Buyer, the Company and their
respective affiliates (collectively, the “ Indemnified
Parties ”) harmless from and against, and agrees to
defend promptly the Indemnified Parties from and reimburse the
Indemnified Parties for, any and all losses, damages, costs,
expenses, liabilities, obligations and claims of any kind,
including, without limitation, any tax cost or reduction in any
loss