AGREEMENT
MEMORANDUM OF AGREEMENT MADE BETWEEN
P. T. XXXXXXX GROUP
(a registered Indonesia Corporation )
and
Environmental Remediation Holding Corp.
(a U.S. Public Company registered in the State of Colorado, USA)
1. INTERPRETATION
1.1. In this Agreement the following acronyms, words and expressions shall,
where context permits, be deemed to have the following meanings.
1.1.1 "ERHC" means Environmental Remediation Holding Corp.
1.1.2 "BAPCO" means Bass American Petroleum Company.
1.1.3 "P. T. " means P. T. Xxxxxxx Group.
1.1.4 "Agreement" means this Agreement.
1.1.5 "Dollars" means U.S. Dollars.
1.1.6 "Effective Date" means the day this Agreement is signed.
1.1.7 "Allotted Xxxxx" means oil and gas xxxxx the PTK/BAP controls.
1.1.8 "MSCF" means Thousand Standard Cubic Feet.
1.1.9 "Commercial Production" means production being economically profitable.
1.1.10 "A.F.E" means Authorized Funds Expenditure.
1.1.11 "Pertimina" The Government Controlled Oil Company.
1.1.12 "PTK/BAP" P.T. Xxxxxxx Group/Bass American Petroleum of Indonesia.
1.1.13 "Working Interest" means a participation in revenues from the increase
in production resulting in PTK/BAP's reworking of any oil and gas xxxxx.
1.2 Words importing the singular meaning include, unless the context other-
wise demands, the plural meaning and visavis.
1.3 The clause headings in the Agreement are for convenience and ease of
reference and shall not affect its construction or interpretation.
1.4 Reference to clauses and subclauses of the Agreement unless the context
clearly indicates otherwise.
2. TERMS AND CONDITIONS OF THE AGREEMENT
2.1 This Agreement is for the formation of a joint venture between P. T.
Xxxxxxx Group and ERHC/BAPCO and shall concern the recovery, workover and oper-
ations of all available oil and gas
xxxxx located in Indonesia. The joint venture will be called P.T. Xxxxxxx/Bass
American Petroleum of Indonesia (PTK/BAP). These oil and gas xxxxx now belong to
Pertimina or other major oil companies in Indonesia.
2.2 This Agreement is entered into between P.T. Xxxxxxx Group and ERHC/BAPCO for
the expressed purpose of obtaining oil and gas lease contracts so they can be
reworked to put them back into commercial production. The joint venture's goal
is to workover these xxxxx and to do the drilling of any future production that
may be required.
2.3 P.T. herewith grants ERHC/BAPCO the right to perform a full and complete
evaluation and do any additional feasibility studies that may be necessary of
the oil, gas and mineral reserves on the xxxxx obtained under this Agreement.
All costs of these studies will be borne by PTK/BAP. All costs will be recovered
by PTK/BAP revenues.
2.4 P.T. undertakes to make available to ERHC/BAPCO, within 21, days any
maps, data, xxxxx runs, production histories or feasibility studies which may be
utilized in the planning of the project. ERHC/BAPCO shall undertake to treat
such information and data with utmost confidentially and not to communicate it
with third parties without prior approval by P.T.
2.5 P.T. is an Indonesia owned and registered Company.
2.6 P.T. will arrange the for the required funding necessary for the rework
of the fields in the joint venture and ERHC/ BAPCO shall provide P.T. with the
technology that will be needed to rework the oil fields. The funding will be
repaid by the PTK/BAP through any revenue earned by the joint venture.
2.7 P.T. upon signing of this Agreement, will apply for the concessions from
the oil companies in Indonesia in the name of the PTK/BAP. P.T. has targeted up
to 1,000 xxxxx that will have, existing, over 10,000 barrels of production.
2.8 P.T. shall arrange the necessary funds to begin operations, with the
funding having a maximum of Five million dollars ($5,500,000). These funds shall
be used in accordance with a "Use of Funds Statement" to be determined and
agreed to by the parties prior to disbursement.
2.9 The PTK/BAP agrees to repay the funds (as defined in paragraph 2.8) provided
in a maximum of 10 years or a minimum of three years as cash allows from oil and
gas production from the joint venture. The PTK/BAP retains the right to prepay
the loan early.
3.0 P.T. agrees to enter into a joint venture with ERHC/BAPCO that shall
provide a "Working Interest" in all xxxxx/ leases obtained by P.T. in addition
to a contract to operate said xxxxx.
3.1 P.T. and ERHC/BAPCO agrees that after "Debt Service" is paid, the main
objective is the recovery and workover of additional xxxxx for the return to
commercial production. Therefore ERHC/BAPCO agrees, that after the costs of
workover of additional xxxxx as selected by P.T. and ERHC/BAPCO, all capital
earned by the joint venture shall be divided between P.T. and
ERHC/BAPCO on a basis of twenty percent (20%) to the original Concession Holder
and forty-one (41%) percent to P.T. The remaining 39.% percent will go to
ERHC/BAPCO and this shall be the "Working Interest" in all xxxxx/leases that are
obtained by P.T. on behalf of the venture.
3.2 The Leases being obtained by P.T. on behalf of the PTK/BAP will be for a
minimum of ten years and will be automatically renewable in five year increments
as long as the PTK/BAP keep the xxxxx they have worked on in production.
3.3 P.T. agrees to provide ERHC/BAPCO an " Assignment of Lease" document on
all leases obtained by P.T. from either Pertimina or other Indonesia oil
companies, with respect to all Leases. All such leases to have xxxxx on said
leases. P.T. also agrees that a UCC-1 Document shall be issued on all truck,
tools, and other equipment and any and all surface equipment as belonging to
each well/lease if ERHC/BAPCO finds it necessary to provide any funding to this
project.
3.4 It is agreed by both parties to this Agreement and the project to which it
concerns shall be funded by PTK/BAP under the schedule as agreed to by P.T. and
ERHC/BAPCO with the first funds being applied to build two (2) BAPCO Tools to be
shipped to Indonesia.
3.5 ERHC, as part of this Agreement agrees to compensate P.T. and Xxxxx
Xxxxxxxxx, P. T.'s consultant, in the following manner: ERHC, upon signing of
the contract, will issue 100,000 shares ERHC 144 stock to Xxxxx Xxxxxxxxx and
$50,000 dollars upon the funding of the project.
Whereas, this Agreement shall become valid on the date signed by both
parties below and shall remain in full force and affect until such time as all
of the terms and conditions as described above shall be met by both parties.
Whereas, It is agreed by both parties to this Agreement, that the first
funds shall be as listed in Addendum One (1) of this Agreement. Said Addendum
shall become part and parcel to this Agreement and accepted by both parties.
Whereas, it is agreed by both parties that the leases obtained by P.T.
for PTK/BAP and may be used as collateral for any required funding by either
party obtaining funding.
This Agreement is entered into and signed this 28 day of July, 1997.
P. T. Xxxxxxx Group Environmental Remediation Holding Corp.
/s/Xxxxxxx X. Xxxxxxxxxx /s/Xxx X. Xxxx, Xx.
Xxxxxxx X. Xxxxxxxxxx Xxx X. Xxxx, Xx.
President President
/s/Xxxxxx XxXxxxx /s/Xxxxx Xxxxxxxxx
Witness Witness
