SETTLEMENT AGREEMENT
This
Settlement Agreement (“Agreement”) is made between Xxxxxx Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxx, and Xxxxx X. Xxxxxxx (collectively, the “Richters”),
on the one hand, and Kestrel Energy, Inc.(“Kestrel”), the merger partner of
Kestrel, Kestrel Holding, LLC (“Holding”) and Samson Oil and Gas Limited
(“Samson”), the Australian parent company of Kestrel and Holding, on the other
hand. Kestrel, Samson and Holding are referred to collectively as the “Company”
herein and the Company and the Richters are referred to collectively as the
“Parties.”
RECITALS
WHEREAS,
by letters dated August 18, 2006 (the “Notices”), each of the Richters made
demand for appraisal rights under the dissenters’ rights provisions of the
Colorado Business Corporation Act, Colo. Rev. Stat. §0-000-000 et seq. (the
“Act”).
WHEREAS,
in the Notices, the Richters rejected the consideration of $142 per share of
Kestrel common stock payable to shareholders of Kestrel pursuant to the terms
of
the July 14, 2006 Plan of Merger (the “Plan of Merger”) by and between Kestrel
and Holding.
WHEREAS,
in the Notices, the Richters demanded the payment of “fair value” pursuant to
the Act and claimed that the “fair value” of Kestrel shares under the Act is
$530 per share (the “Claims”).
WHEREAS,
the Richters represented in the Notices that they are the beneficial owners
of
2,308 shares held by Cede & Co. as nominee, with Xxxxxx Xxxxxxx holding 988
shares, Xxxxxxx Xxxxxxx holding 551 shares, Xxxxxxx Xxxxxxx holding 539 shares
and Xxxxx X. Xxxxxxx holding 230 shares (the “Shares”).
WHEREAS,
without admission of liability, the Parties wish to finally settle and terminate
the Claims and all liabilities, expenses, claims and counterclaims related
thereto.
TERMS
In
consideration of the mutual promises and covenants set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereby contract, covenant and agree as
follows:
1. Payment.
On
October 16, 2006, assuming the full execution of this Agreement, the Company
shall pay to each of the Richters the following sums (the
“Payments”):
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Xxxxxx
Xxxxxxx
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$
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142,163.32
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||
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Xxxxxxx
Xxxxxxx
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$
|
79,283.39
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||
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Xxxxxxx
Xxxxxxx
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$
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77,556.71
|
||
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Xxxxx
X. Xxxxxxx
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$
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33,094.70
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2. Options.
No
later than twenty (20) days after the Payments, Samson will deliver to the
Richters three year transferable options, issued in their name or in the name
of
such nominee(s) as they may direct, to purchase an aggregate of three million
(3,000,000) freely transferable shares of Samson’s capital stock, of the type
traded on the Australian Stock Exchange, at an exercise price of AUS$0.42 per
share (the “Options”), broken down as follows:
|
Xxxxxx
Xxxxxxx
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1,284,229
Options
|
|
Xxxxxxx
Xxxxxxx
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716,204
Options
|
|
Xxxxxxx
Xxxxxxx
|
700,607
Options
|
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Xxxxx
Xxxxxxx
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298,960
Options
|
3. Covenant
Not to Xxx.
The
Parties agree and covenant not to assert the Claims or any other claims or
counterclaims relating to the value of the Shares, the adequacy of the
consideration paid for the Shares, the accuracy or completeness of the
disclosures made by the Company relating to the Plan of Merger or this
Agreement, in any other forum or in any other legal action, nor encourage or
cooperate with others who might bring or threaten similar claims against the
Company.
4. Delivery
of Stock Certificates and Documents.
On
October 16, 2006, or on a date as soon thereafter as is reasonably feasible
for
the Richters’ broker, each of the Richters will deliver to the Company (1) all
stock certificates and other documents evidencing ownership of the Shares and
(2) all documents required by the Letter of Transmittal sent to shareholders
in
connection with the Plan of Merger, fully completed and executed in accordance
with the instructions contained in the Letter of Transmittal, including the
Spousal Signature or Certification of No Spousal Signature Required, the
Individual’s Certificate of Non-Foreign Status and an IRS Form W-9.
5. Costs
of Litigation.
The
Parties acknowledge that they bear their own attorneys’ fees and costs relating
to the Claims.
6. Richters’
Release of Claims.
Each of
the
Richters, for themselves and for their respective officers, directors,
employees, shareholders, attorneys, parents, subsidiaries, affiliates, related
corporations, agents, heirs, successors, assigns and personal representatives,
hereby fully and finally release and forever discharge the Company and its
respective officers, directors, employees, shareholders, attorneys, parents,
subsidiaries, affiliates, related corporations, agents, heirs, successors,
assigns and personal representatives (the “Company Released Parties”), from any
and all claims, debts, liabilities, demands, obligations, damages, losses,
causes of action, costs, expenses or attorneys’ fees, whether known or unknown,
accrued or unaccrued, existing or hereafter acquired, arising from any
agreement, occurrence, matter, fact or thing, existing or occurring from the
beginning of time to the date of this Agreement, that they may have against
the
Company Released Parties, including but not limited to, the Claims.
7. The
Company’s Release of Claims.
The
Company, for itself and for its respective officers, directors, employees,
shareholders, attorneys, parents, subsidiaries, affiliates, related
corporations, agents, heirs, successors, assigns and personal representatives,
hereby fully and finally releases and forever discharges the Richters and their
respective officers, directors, employees, shareholders, attorneys, parents,
subsidiaries, affiliates, related corporations, agents, heirs, successors,
assigns and personal representatives (the “Richters Released Parties”), from any
and all claims, debts, liabilities, demands, obligations, damages, losses,
causes of action, costs, expenses or attorneys’ fees, whether known or unknown,
accrued or unaccrued, existing or hereafter acquired, arising from any
agreement, occurrence, matter, fact or thing, existing or occurring from the
beginning of time to the date of this Agreement, that they may have against
the
Richters Released Parties, including but not limited to, the Claims.
8. Confidentiality.
The
Parties agree that, notwithstanding this Agreement, the Payments and the
releases of the Company Released Parties and the Richters Released Parties,
the
confidentiality obligations created by the September 2006 Confidentiality
Agreements between Kestrel and each of the Richters (the “NDAs”) (a) remain in
full force and effect, (b) are binding upon and inure to the benefit of all
of
the Parties as if they were parties thereto, and (c) shall be interpreted to
prohibit the disclosure of this Agreement or its terms, which shall for all
purposes be treated as “Confidential Information” as defined by the Agreement,
except to the extent permitted by the NDAs, including but not limited to Section
4 thereof, entitled “Legally Compelled Disclosure.
9. Representation
by Counsel.
The
Parties hereby acknowledge that they have been represented by counsel of their
choice throughout the negotiations which preceded the preparation and execution
of this Agreement, and that they have carefully and thoroughly reviewed this
Agreement, in its entirety, with that counsel and that counsel has approved
it
as to form.
10. Survival
of Obligations.
The
rights and obligations of the Parties as set forth in this Agreement shall
remain in effect without limitation as to time.
11. No
Admission of Liability.
Nothing
in this Agreement, including the fact that it was entered into by the Parties,
shall constitute, or be construed as, an admission on behalf of any of the
Parties as to the validity of any claims, defenses or allegations concerning
the
Claims. This Agreement shall not be admissible in any court, administrative
agency or tribunal for any purpose, with the exception of a proceeding to
enforce or interpret the terms of this Agreement.
12. Authority
to Execute and Perform.
All
action necessary to make the provisions of this Agreement binding on the
Parties, their respective parents, subsidiaries, related corporations,
affiliates, successors, assigns, employees, directors and management, has been
properly taken. The persons signing this Agreement on behalf of the Parties
are
duly authorized to execute and to perform this Agreement. This Agreement, when
executed, will be the legal and binding obligation of the Parties.
13. Binding
Effect.
The
terms and conditions contained in this Agreement shall inure to the benefit
of,
and be binding upon, the successors, assigns, heirs, survivors, and personal
representatives of the Parties.
14. Severability.
If any
provision of this Agreement is held illegal, invalid or unenforceable, such
holding shall not affect any other provisions hereof. In the event any provision
is held illegal, invalid, or unenforceable, such provision shall be limited
so
as to effect the intent of the Parties to the fullest extent permitted by
applicable law.
15. Enforcement.
The
Releases contained herein do not release any claims for enforcement of the
terms, conditions or warranties contained in this Agreement. The Parties shall
be free to pursue any remedies available to them to enforce the terms of this
Agreement.
16. Warranty
of Non-Assignment.
The
Parties represent and warrant that none of them have assigned or transferred,
or
purported to assign or transfer, to any person or entity any claims, debts,
liabilities, demands, rights, obligations, damages, losses, causes of action,
costs, expenses, and attorneys’ fees subject to this Agreement.
17. Entire
Agreement.
This
Agreement is the entire agreement between the Parties. This Agreement supersedes
any and all prior agreements and cannot be modified except in writing signed
by
all Parties.
18. Execution
in Counterparts.
This
Agreement may be executed in counterparts, all of which shall, upon execution
and delivery of identical counterparts by all Parties, comprise a single
agreement. Counterpart signatures may be exchanged by facsimile and shall be
deemed delivered when received by the Party.
19. Choice
of Law and Venue Selection.
The
Parties agree that any proceeding or action that might be initiated to enforce
or interpret the terms of the Agreement will be brought only in Denver, Colorado
and that Colorado law or, if applicable, federal law will apply in such
proceeding.
IN
WITNESS WHEREOF, the Parties have executed this Settlement Agreement on the
dates written below.
| XXXXXX XXXXXXX | ||
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| Date: October 17, 2006 | By: | /s/ Xxxxxx Xxxxxxx |
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Xxxxxx Xxxxxxx |
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| XXXXXXX XXXXXXX | ||
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| Date: October 17, 2006 | By: | /s/ Xxxxxxxx Xxxxxxx |
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Xxxxxxxx Xxxxxxx |
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| XXXXXXX XXXXXXX | ||
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| Date: October 17, 2006 | By: | /s/ Xxxxxxx Xxxxxxx |
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Xxxxxxx Xxxxxxx |
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| XXXXX X. XXXXXXX | ||
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| Date: October 17, 2006 | By: | /s/ Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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| SAMSON OIL AND GAS LIMITED | ||
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| Date: October 20, 2006 | By: | /s/ Xxxxx Xxxx |
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Xxxxx Xxxx |
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| President & Director | ||
| KESTREL HOLDING, LLC | ||
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| Date: October 20, 2006 | By: | /s/ Xxxxx Xxxx |
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Xxxxx Xxxx |
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| Manager | ||
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KESTREL
ENERGY, INC.
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| Date: October 20, 2006 | By: | /s/ Xxxxx Xxxx |
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Xxxxx Xxxx |
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| President & Director | ||
