ASSIGNMENT OF GENERAL PARTNER INTEREST
THIS ASSIGNMENT OF GENERAL PARTNER INTEREST (this "ASSIGNMENT") is made
and entered into this 4th day of May, 1998, by and between Cliffwood Energy
Company, a California corporation ("ASSIGNOR"), and Cliffwood Oil & Gas Corp., a
Texas corporation ("ASSIGNEE").
RECITALS:
A. Reference is hereby made to the Cliffwood Acquisition - 1996
Limited Partnership, a Texas limited partnership (the "PARTNERSHIP"). The
Partnership is governed by that certain Agreement of Limited Partnership dated
as of September 27, 1996, as amended (the "PARTNERSHIP AGREEMENT").
B. Assignor is the sole general partner of the Partnership and is
the record and beneficial owner of an interest in the Partnership as a general
partner (such general partner interest being called the "INTEREST").
C. Assignor desires to assign the Interest to Assignee, and
Assignee desires to accept the Interest from Assignor, on the terms and
conditions set forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals and
the mutual covenants and agreements contained herein, Assignor and Assignee do
hereby agree as follows:
1. ASSIGNMENT. Assignor hereby transfers and assigns the Interest
to Assignee, together with all of their respective rights and obligations as a
general partner of the Partnership appurtenant thereto, it being the intention
of Assignor and Assignee that Assignee shall become a substituted general
partner of the Partnership in place of Assignor.
2. ACCEPTANCE. Assignee hereby accepts the Interest and agrees to
become a substituted general partner of the Partnership in place of Assignor
with respect to the Interest and agrees to be bound by all of the terms and
provisions of the Partnership Agreement.
3. EFFECTIVE DATE. The transactions contemplated hereby shall be
effective as of 12:01 o'clock a.m., Central Standard Time, on April 1, 1998 (the
"EFFECTIVE DATE").
4. ASSUMPTION AND INDEMNIFICATION. Assignor agrees to indemnify
and hold Assignee and its shareholders, directors, officers, employees and
agents harmless from and against any and all claims, actions, liabilities,
losses, damages, costs or expenses (including court costs and attorneys' fees)
of any kind or character arising out of or otherwise
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relating to the ownership of the Interest before the Effective Date. Assignee
agrees (a) to assume, and to timely pay and perform, all duties, obligations and
liabilities relating to the ownership of the Interest after the Effective Date
and (b) to indemnify and hold Assignor, its shareholders, directors, officers,
employees and agents harmless from and against any and all claims, actions,
liabilities, losses, damages, costs or expenses (including court costs and
attorneys' fees) of any kind or character arising out of or otherwise relating
to the ownership of the Interest after the Effective Date.
5. BINDING EFFECT; SUCCESSORS AND ASSIGNS; AMENDMENTS. This
Assignment shall be binding on the parties hereto and their respective
successors and assigns. This Assignment may be amended, modified, supplemented,
restated or discharged (and provisions hereof may be waived) only by an
instrument in writing signed by the parties hereto.
6. SEVERABILITY. If any provision of this Assignment is held to
be unenforceable, this Assignment shall be considered divisible and such
provision shall be deemed inoperative to the extent it is deemed unenforceable,
and in all other respects this Assignment shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by applicable law.
7. NO WAIVER. The failure of any party hereto to insist upon
strict performance of a covenant hereunder or of any obligation hereunder,
irrespective of the length of time for which such failure continues, shall not
be a waiver of such party's right to demand strict compliance in the future. No
consent or waiver, express or implied, to or of any breach or default in the
performance of any obligation hereunder shall constitute a consent or waiver to
or of any other breach or default in the performance of the same or any other
obligation hereunder.
8. COUNTERPARTS. This Assignment may be executed in multiple
counterparts, each of which shall be deemed an original and all of which shall
constitute but one and the same instrument.
9. GOVERNING LAW. This Assignment shall be governed by the laws
of the State of Texas.
10. AGREEMENT OF LIMITED PARTNERS; AGREEMENT OF TEXOIL.
(a) By their respective signatures below, Energy Capital
Investment Company PLC, an English investment company, and EnCap Equity
1996 Limited Partnership, a Texas limited partnership, in their
capacities as the limited partners of the Partnership (the "LIMITED
PARTNERS"), hereby acknowledge and agree as follows: (i) the terms and
provisions of the Partnership Agreement have either been complied
with or waived with respect to the transfer and assignment of the
Interest by Assignor
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to Assignee; (ii) Assignee shall be substituted as general partner of
the Partnership in place of Assignor with respect to the Interest (and
the Limited Partners hereby grant their consent thereto for purposes of
compliance with the Partnership Agreement); and (iii) the execution and
delivery by Assignor and Assignee of this Assignment shall be sufficient
to effect the above described substitution. By their respective
signatures below, the Limited Partners hereby waive the obligations of
Assignee under that certain Guaranty and Support Agreement dated
September 27, 1996 (the "GUARANTY"), and executed by Assignee in favor
of the Partnership and the Limited Partners.
(b) By its respective signature below, Texoil, Inc., a Nevada
corporation and the owner of 100% of the issued and outstanding capital
stock of Assignee ("PARENT"), hereby covenants and agrees for the
benefit of the Partnership and the Limited Partners as follows: (i) that
if, at any time, Assignee's net worth (as determined in accordance with
generally accepted accounting principles) is less than $5,000,000,
Parent will, upon request of the Limited Partners by notice in writing
to Parent, execute and deliver a guaranty and support agreement in form
and scope reasonably acceptable to the Limited Partners (it being
agreed, however, that the execution and delivery by Parent of a guaranty
and support agreement substantially in the form of the Guaranty (with
appropriate changes for name and dates) shall be deemed reasonably
acceptable to the Limited Partners); and (ii) that it understands that
the Limited Partners would not be willing to execute and deliver this
Assignment without the covenants and agreements of Parent herein and
that such covenants and agreements are being made to induce the Limited
Partners to execute and deliver this Assignment.
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IN WITNESS WHEREOF, the parties hereto have executed this
Assignment as of the date set forth above.
ASSIGNOR:
CLIFFWOOD ENERGY COMPANY
By: ____________________________
Name: Frank A. Lodzinski
Title: President
ASSIGNEE:
CLIFFWOOD OIL & GAS CORP.
By: ________________________________
Name: Frank A. Lodzinski
Title: President
ACCEPTED AND AGREED TO
BY THE LIMITED PARTNERS
AS OF THE DATE SET FORTH ABOVE:
ENCAP EQUITY 1996 LIMITED PARTNERSHIP
By: ENCAP INVESTMENTS L.C.
By: ________________________
Name: Robert L. Zorich
Title: Managing Director
ENERGY CAPITAL INVESTMENT COMPANY PLC
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By: ____________________________________
Name: Gary R. Petersen
Title: Director
ACCEPTED AND AGREED TO
AS OF THE DATE SET FORTH ABOVE:
TEXOIL, INC.
By: _______________________________
Name: _____________________________
Title: _______________________
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