COMPROMISE SETTLEMENT AGREEMENT
THIS
COMPROMISE SETTLEMENT AGREEMENT (“Agreement”) is between XXXXX
ENERGY 1986A PARTNERSHIP,
a New
York limited partnership (“Xxxxx Energy”), XXXXXX
X. XXXXX, an
individual resident of the State of New York (“Xxxxx”), and THE AMERICAN
ENERGY GROUP, LTD., a
Nevada
corporation.
RECITALS
WHEREAS,
there is a dispute between the parties to this Agreement concerning the
interests of each in and to certain oil and gas leases located in Galveston
County, Texas, known generally as the “Xxxx Xxxxxxx “A” and “B” leases, as these
lease are more specifically defined on Exhibit
“A”
attached
hereto and incorporated by reference herein (the “Leases”), and as to the rights
of the parties to exploit their interests in the Leases, including rights to
use
of the surface (the “Dispute”);
WHEREAS,
the parties have resolved their Dispute and desire to dispose of the entire
controversy and dispute between them, including all claims and causes of action
of any kind that currently exist or that may exist in the future that relate
in
any way to the interests of each party in the Leases or the rights and
operations of each related thereto including
NOW,
THEREFOR, for and in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Stipulation
of Interest and Cross - Conveyance. Xxxxx
Energy and AEG will execute a Stipulation of Interest and Cross - Conveyance,
in
a mutually acceptable and recordable form, to provide as follows:
(a) AEG
will
convey to Xxxxx Energy all rights and claims of AEG to;
i) All
interests in the Leases including and above 10,000’; and
ii) All
interests in or related to the “15% Luck Energy Corporation back in” at 125% of
cost recoupment.
(b) Xxxxx
Energy and Xxxxx will convey to AEG all rights and claims of Xxxxx Energy
to:
i) All
interests in the Xxxx Xxxxxxx A & B Leases below the depth of 10,000’;
and
ii) A
3%
overriding royalty interest in the Xxxx Xxxxxxx “A” Lease on all oil and gas
production below 10,000’.
2. Assignment
of Partnership Interest.
AEG will
assign and release unto Xxxxx Energy all of AEG’s rights and claims in and to
any interest in Xxxxx Energy, pursuant to an Assignment of Partnership Interest
in a mutually acceptable form.
3. Review
of Seismic Information. Xxxxx
Energy will permit AEG to review, on AEG’s premises, all seismic information of
Xxxxx Energy related to the Leases, and such additional information as is
necessary for the review and interpretation of such seismic information and
has
provided the information attached as Exhibit “A” hereto and will deliver a tape
of usable quality on or about the date of the execution of this Agreement
(collectively, the “Seismic Information”). AEG agrees that it has been fully
informed, and acknowledges and agrees that, the use of the Seismic Information
is subject to restrictions pursuant to an agreement between Xxxxx Energy and
Aspect Resources. AEG agrees to return all Seismic Information to Xxxxx Energy
within thirty (30) days of delivery to AEG. Xxxxx Energy and Xxxxx acknowledge
that this Seismic Information constitutes a material consideration for this
Agreement. Xxxxx Energy and Xxxxx warrant and represent that a) the Seismic
Information is the same information received from Aspect Resources, b) the
seismic tape and data is of a quality which is sufficient for a person
experienced in seismic evaluation to conduct a review and evaluation consistent
with industry standards for review of seismic; provided, however, that Xxxxx
Energy makes no warranty or representation that the Seismic Information is
indicative of any particular subsurface condition, and c) Xxxxx Energy and
Xxxxx
shall use their best efforts to obtain from Aspect Resources, upon AEG’s
request, information which may be helpful in AEG’s review of the seismic.
4. Operations
by AEG and Xxxxx Energy. AEG
may
select its own operator to conduct operations for drilling new xxxxx on the
Leases below the depth of 10,000 feet. AEG may manage the operations of new
xxxxx on the Leases producing from a depth of below 10,000 feet. AEG’s
operations on new xxxxx on the Leases producing from a depth of below 10,000
feet shall be conducted in reasonable cooperation with Xxxxx Energy as
represented by Xxxx Xxxxx, Xxxxx Energy’s field supervisor, and in observance of
all of Xxxxx Energy’s proprietary rights to existing and future Xxxxx Energy
operations facilities on the Leases. Xxxxx Energy shall likewise conduct its
operations in reasonable cooperation with AEG’s operations personnel. AEG may
utilize, in its discretion and subject to the limitations contained below,
existing roads, salt water disposal systems, hot tap for gas sales and other
facilities (collectively, the “Xxxxx Energy Facilities”) upon the payment of
reasonable compensation to Xxxxx Energy for such use to be determined by mutual
agreement between the parties. It is specifically understood and agreed that
AEG’s use of Xxxxx Energy Facilities is subject to the prior and superior right
of Xxxxx Energy to use the Xxxxx Energy Facilities, and that AEG is granted
and
shall have no right to make any use of the Xxxxx Energy Facilities which would
interfere with the operations of Xxxxx Energy on the Leases. With respect to
all
operations conducted by AEG on the Leases and, in the event AEG determines
to
use any Xxxxx Energy Facilities, AEG agrees to be fully responsible for and
assume, and shall RELEASE, DEFEND, INDEMNIFY and HOLD HARMLESS Xxxxx Energy,
its
related and affiliated companies and all of their co - owners, partners their
respective officers, directors, managers, employees, agents, assigns,
contractors and subcontractors (hereafter, the “Indemnified Parties”) from and
against any and all claims, damages, demands, liability, costs and causes of
action of every kind and character, without limit and without regard to the
cause or causes thereof or the negligence of any party or parties, arising
directly or indirectly in connection with the operations of AEG on the Lease
or
the use of the Xxxxx Energy Facilities, specifically including but not limited
to bodily injury, death, or damage to property (including cattle) of AEG or
AEG
employees, subcontractors of any tier, or their employees, or AEG’s invitees.
AEG’s release and indemnity shall be without regard to and without any right to
contribution from any insurance maintained by Xxxxx Energy The release and
indemnity provisions hereof shall apply whether or not the liabilities in
question arose solely or in part from the ACTIVE,
PASSIVE, SOLE OR CONCURRENT NEGLIGENCE OF ANY INDEMNIFIED PARTY.
AEG
acknowledges that this indemnity and release is conspicuous. The
indemnities and assumptions of liabilities and obligations herein provided
for
shall continue in full force and effect notwithstanding the expiration or other
termination of this Agreement. AEG is not obligated to use any of Xxxxx Energy’s
facilities.
5. Release
by Xxxxx and Xxxxx Energy. Xxxxx
Energy and Xxxxx, for themselves and their heirs, estates, legal representatives
and assigns, hereby RELEASE, ACQUIT and FOREVER DISCHARGE AEG, and its officers,
managers, partners, directors, shareholders, employees, representatives, agents,
affiliates, parents and subsidiaries (the “AEG Release Group”), from any and all
existing and future claims, demands, causes of action, obligations and
liabilities of every kind, whether in contract or in tort, or arising under
or
by virtue of any statute or regulation, that are now recognized by law or that
may be created or recognized in the future by any manner, whether known or
unknown, including but not limited to all causes of action asserted or that
could have been asserted for all losses, damages, or remedies of any kind that
are now recognized by law or that may be created or recognized in the future
by
any manner, including without limitation by statute, regulation, or judicial
decision, and including but not limited to all actual damages, exemplary and
punitive damages, penalties of any kind, and claims for prejudgment and post
judgment interest arising out of or in any manner related to any claims,
demands, causes of action, liabilities, and obligations whatsoever arising
under, out of and/or in connection with the Leases, ownership thereof,
operations thereon and/or the production of oil and gas therefrom through the
Effective Date of Release.
6. Representation
of Xxxxx and Xxxxx Energy. Xxxxx
Energy and Xxxxx expressly warrant and represent to the AEG Release Group that
(1) they are each fully authorized and empowered to execute and deliver this
Agreement, (2) before executing this Agreement they have fully informed
themselves of its terms, contents, conditions and effects, (3) they have relied
solely and completely upon their own judgment and the advice of their counsel
in
making this settlement, and (4) they fully understand that this is a full,
complete and final release.
7. Release
by AEG. AEG
for
itself, its heirs, estate, legal representatives, successors and assigns, hereby
RELEASES, ACQUITS, and FOREVER DISCHARGES Xxxxx Energy, Xxxxx, HMP Oil Limited
Company, and Xxxxxx Xxxx, and their respective officers, managers, partners,
directors, shareholders, employees, representatives, agents, affiliates, parents
and subsidiaries (“Xxxxx Release Group”) from any and all existing and future
claims, demands, causes of action, obligations and liabilities of every kind,
whether in contract or in tort, or arising under or by virtue of any statute
or
regulation, that are now recognized by law or that may be created or recognized
in the future by any manner, whether known or unknown, including but not limited
to all causes of action asserted or that could have been asserted for all
losses, damages, or remedies of any kind that are now recognized by law or
that
may be created or recognized in the future by any manner, including without
limitation by statute, regulation, or judicial decision, and including but
not
limited to all actual damages, exemplary and punitive damages, penalties of
any
kind, and claims for prejudgment and post judgment interest arising out of
or in
any manner related to any claims, demands, causes of action, liabilities, and
obligations whatsoever arising under, out of and/or in connection with the
Leases, ownership thereof, operations thereon and/or the production of oil
and
gas therefrom through the Effective Date of Release.
8. Representation
of AEG. AEG
expressly warrants and represents to the Xxxxx Release Group that (1) it is
fully authorized and empowered to execute and deliver this Mutual Release,
(2)
before executing this Mutual Release it has fully informed itself of its terms,
contents, conditions and effects, (3) it has relied solely and completely upon
its own judgment and the advice of its counsel in making this settlement, and
(4) it fully understands that this is a full, complete and final release.
9. Third
Party Beneficiaries. It
is
expressly understood and agreed that the HMP Oil Limited Company and Xxxxxx
Xxxx
are third party beneficiaries of this Agreement.
10. No
Admission.
It is
expressly understood this Agreement is for settlement purposes only and to
compromise and fully settle doubtful and disputed claims. By entering into
this
Agreement no party makes any admission of any liability of any kind, all of
which liability is expressly and specifically denied.
11. Further
Actions. Each
party hereto agrees to execute and deliver such documents and take such further
actions as may be necessary to effect the purposes and objectives of this
Agreement.
12. Governing
Law; Venue. This
Agreement is made according to the laws of the State of Texas. The parties
expressly agree that this Agreement is governed by, and will be construed and
enforced in accordance with Texas law. In the event of any dispute arising
hereunder, the parties agree that courts of the State of Texas sitting in
Galveston County, Texas, shall have exclusive venue over any action brought
hereunder.
13. Binding
Agreement. This
Agreement is binding on and inures to the benefit of the parties and their
respective heirs, representatives, successors, and assigns.
14. Entire
Agreement. This
Agreement contains the entire Agreement between the parties. It supersedes
any
and all prior Agreements, arrangements, or understandings between the parties
on
all subjects in any way related to the transaction or occurrence described
in
this Agreement. No oral understandings, statements, promises, or inducements
contrary to or consistent with the terms of this Agreement exist. This Agreement
is not subject to any modification, waiver, or addition that is made orally.
This Agreement is subject to modification, waiver, or addition only by means
of
a writing signed by all parties.
15. Counterparts;
Facsimile Signatures. This
Agreement may be executed in a number of identical counterparts, each of which
shall be deemed an original for all purposes. This Agreement may be executed
by
facsimile signature, which shall be deemed an original for all
purposes.
THE
BALANCE OF THIS PAGE IS INTENTIONALLY BLANK.
SIGNATURES
APPEAR ON THE FOLLOWING PAGE.
IN
WITNESS WHEREOF, the parties and their legal counsel have executed this
Agreement.
| XXXXX ENERGY 1986A PARTNERSHIP | ||
| acting by and through its general partner, | ||
| |
|
|
| By: | ||
|
Xxxxxx X. Xxxxx, General Partner |
||
| Xxxxx Energy 1986A Partnership | ||
|
XXXXXX X. XXXXX |
||
| THE AMERICAN ENERGY GROUP, LTD. | ||
| |
|
|
| By: | ||
|
Xxxxxx Xxxxxxx, President and CEO |
||
EXHIBIT
“A”
Xxxx
Xxxxxxx A Lease:
Oil
and
Gas Lease dated April 30, 1935, between XXXX XXXXXXX, as Lessor and COAST
PETROLEUM CORPORATION, as Lessee, covering 393 acres, more or less, recorded
in
Volume 516, Page 313, Oil and Gas Records, Galveston County, Texas.
Xxxx
Xxxxxxx B Lease:
Oil,
Gas
and Mining Lease dated May 4, 1949, between XXXX XXXXXXX and XXXXXX XXXXXX
XXXXXXX, as Lessors, and XXXX X. XXXXX, as Lessee, covering 1,400 acres, more
or
less, recorded in Volume 779, Page 573, Oil and Gas Records, Galveston County,
Texas, insofar and only insofar as said lease is described as containing 280
acres in that certain Partial Release, dated January 28, 1985, between ATLANTIC
RICHFIELD COMPANY, as Lessee, and XXXXXXXX X. XXXX, XXXX XXXXXXX III, XXXXX
XXXXXXX and XXXXXX XXXXXX GISBEY, Trustee, as Lessors, recorded in Film Code
###-##-####, Deed Records, Galveston County, Texas, and also in that unrecorded
Partial Release of January 28, 1985, between ATLANTIC RICHFIELD COMPANY, as
Lessee, and XXXXXXXX X. XXXX, XXXX XXXXXXX XX, XXXXX XXXXXXX and XXXXXX XXXXXX
XXXXXX, Trustee, as Lessors.
