SETTLEMENT AGREEMENT
The undersigned ENERGEX OIL, INC. DBA ENERGEX, INC. ("Energex");
XXXXXXX XXXX XXXXXX ("Xxxxxx"); FIRST AMERICAN OF BRECKENRIDGE, INC. D/B/A
FIRST AMERICAN OPERATING, XXXXX X. JAKOBOT, and XXXXXX XXXXXXX JAKOBOT
("Jakobot" collectively), for and in consideration of the premises and in
consideration of the mutual covenants, agreements and other consideration herein
recited, do hereby stipulate, contract and agree to settle all issues,
differences, controversies and claims of every nature with CELEBRITY
ENTERTAINMENT, INC. ("Celebrity") under the following terms and conditions, to-
wit:
1. The following terms, as used in this Agreement, shall mean:
A. The Green Lease - Oil and Gas Lease dated August 1, 1992, from
X. X. Xxxxx, Xx. et al, Lessors, to Throckmorton Oil Company,
Lessee, recorded in Volume 1064, Page 100, of the Official Public
Records of Xxxxxxxx County, Texas, covering 9947.38 acres, more or
less, in Xxxxxxxx and Xxxxxxxxxxx Counties, Texas, a copy of said
Lease being attached as Exhibit "A".
X. Xxxxxxxxx - Energex Farmout Agreement - That certain Farmout
Agreement dated April 1, 1997, between Xxxxxxxxx Properties, Ltd.
and Energex, Inc. covering the East Green "H" acreage in Xxxxxxxx
County, Texas, a copy of said Agreement being attached hereto as
Exhibit "B".
C. 640 acre HBP Tract - Six Hundred Forty (640) acres which is
held by production by under a prior oil and Gas Lease as outlined in
red on the plat attached hereto as Exhibit "C".
D. Monterey Well - The Energex #2 Monterey Well and the 20-acre
tract attributable to said well as identified in Exhibit "D"
attached hereto.
X. Xxxxxxx'x Wish #1 Well - The Xxxxxxx'x Wish #1 Well and the 20-
acre tract surrounding same, said tract being outlined in red on the
plat attached hereto as Exhibit "E".
X. Xxxxxxx'x Wish #2 Well - The Xxxxxxx'x Wish #2 well (water
disposal well) and the 20-acre tract surrounding same, said tract
being outlined in green on the plat attached hereto as Exhibit "E".
G. Aspen Well - The #1 Aspen Well and the 20-acre tract
surrounding same as identified and outlined in red on Exhibit "F"
attached hereto.
H. Catalina Well - The Catalina Well and the 20-acre tract
surrounding same as identified and outlined in red on Exhibit "G"
attached hereto.
I. Cozumel Well - The Cozumel Well and the 20-acre tract
surrounding same as identified and outlined in red on Exhibit "H"
attached hereto.
X. Xxxxxx Trucking Well - The Xxxxxx Trucking Well and the 20-acre
tract surrounding same as identified and outlined in red on Exhibit
"I" attached hereto.
K. Carmel Well - The Carmel Well and the 20-acre tract surrounding
same as identified and outlined in green on Exhibit "I" attached
hereto.
L. First American #1 Rio Well - Proposed location for the drilling
of the First American #1 Rio Well and the 20-acre tract surrounding
such location as identified and outlined in red on Exhibit "J"
attached hereto.
M. Celebrity-Energex Dead of Trust - Deed of Trust dated January
22, 1997, from Energex, Inc.( Grantor, to Xxxxxx Xxxxxx, Xx.,
Trustee, for the benefit of Celebrity Entertainment, Inc. securing a
Promissory Note in the original principal sum of $1,312,500.00, all
of the lands described and included in the Green Ranch Oil & Gas
Lease attached hereto as Exhibit "K", and being recorded in Volume
1302, Page 205, official Public Records of Xxxxxxxx County, Texas.
2. Cash Payments. Upon the final execution of this Agreement by all
parties, and conditioned upon the performance by all parties of all obligations
imposed upon them herein, Celebrity shall make the following payments, to-wit:
A. Celebrity shall pay to Energex the sum of $56,000.00 in cash.
B. Celebrity shall pay to Jakobot the sum of $30,000.00 in cash.
3. Deferred Payments. In addition to the cash consideration called for
in Paragraph 2 above, Celebrity shall make the following payments, to-wit:
A. Celebrity shall pay to Energex the sum of $80,000.00, said
payment to be made in eight (8) monthly installments of $10,000.00
each, the first such installment to be due one (1) month after the
payment to Energex of the consideration called for in Paragraph 2.A.
above.
B. Celebrity shall pay to Jakobot the sum of $210,000.00, said
payment to be made in twenty-one(21)monthly installments of
$10,000.00 each, the first such installment to be due one (1) month
after the payment to said parties of the consideration called for in
Paragraph 2.B. above.
C. Celebrity shall continue to pay promptly and when due, the
remaining $150,000.00 which is unpaid at the present time on that
certain Settlement and Forbearance Agreement dated June 16, 1997,
between Xxxxx X. Jakobot et al, Celebrity Entertainment, Inc. and
the Xxxxxxx Xxxx Estate.
4. Foreclosure. Energex shall cooperate with the foreclosure by
Celebrity of the Celebrity-Energex Dead of Trust, and all Stock in Celebrity
which has been issued to Energex and/or Pedrie shall be cancelled and voided on
the Corporation's books. All sums received from such foreclosure shall be
credited to the $1,312,500.00 Note from Energex to Celebrity; however, Celebrity
expressly agrees not to seek a deficiency judgment should a deficiency arise as
a result of the aforementioned foreclosures. It is specifically agreed that the
foreclosure of the Celebrity Energex Deed of Trust shall not affect the 640-acre
HBP Tract, the Aspen Well, the Catalina well, the Cozumel well, the Xxxxxx
Trucking Well, the Carmel Well, the Xxxxxxx'x Wish #1 Well, or the Xxxxxxx'x
Wish #2 Well. Celebrity by the execution hereof expressly renounces any
interest in and to the last-above mentioned xxxxx and the acreage attributable
thereto and acknowledges that its Deed of Trust does not cover or affect the
640-acre HBP Tract.
5. Suspense Monies. It is stipulated and agreed that there is
presently the sum of approximately $25,000.00 held in suspense by the crude oil
and/or gas purchasers which is attributable to the working interest in the
Monterey Well. The acreage covered by the Monterey Well is subject to the
Energex - Celebrity Deed of Trust, and any monies derived from the sale of oil
or gas from said well are subject to the security agreement lien as to proceeds.
Celebrity shall be entitled to all suspense monies held by any and all oil
and/or gas purchasers derived from the sale of oil and/or gas attributable to
Energex from the Monterey Well or lease. Energex, Pedrie and Jakobot, when
requested by Celebrity, shall notify all oil and/or gas purchasers holding
suspense monies on the Monterey Well that said monies should be paid to
Celebrity.
6. Monterey-Well Debts. Celebrity, in keeping with a prior agreement
with the other working interest owners in the Monterey Well, agrees to utilize
the funds received from the suspense monies referred to in Paragraph 5 above to
pay certain debts and expenses that have been incurred in the drilling and
completion of the Monterey Well, said expenses being limited to the sum of
$8,102.90, being the items that are listed in Exhibit "L" attached hereto.
7. Blanket Assignment of Interests. At such time as Celebrity
completes its foreclosure of the Energex - Celebrity Deed of Trust, ENERGEX
OIL, INC. DBA ENERGEX, INC., XXXXXXX XXXX XXXXXX, FIRST AMERICAN OF
BRECKENRIDGE, INC. D/B/A FIRST AMERICAN OPERATING, XXXXX X. JAKOBOT, and XXXXXX
XXXXXXX JAKOBOT expressly agree to execute in favor of the purchaser at the
foreclosure sale a quitclaim conveyance of all of their right, title and
interest in and to the Green Lease and all acreage covered thereby, save and
except the 640-acre HBP Tract and the 20-acre tracts attributable to the Aspen
Well, the Catalina Well, the Cozumel Well, the Xxxxxx Trucking Well, the Carmel
Well, the Xxxxxxx'x Wish 01 Well and the Xxxxxxx'x Wish #2 Well. Such
instrument shall be in form and content satisfactory to Celebrity.
8. Saltwater Disposal Well. It is agreed that the Xxxxxxx'x Wish #2
Well is presently configured and equipped as a saltwater disposal well.
Celebrity and its successors and assigns shall have the right to utilize said
Well for the purpose of injecting salt water produced from any and all xxxxx
which Celebrity and/or its successors and assigns may drill on the Green Lease.
Celebrity shall pay ten cents ($.10) per barrel for each barrel of water
injected into the aforementioned well. Jakobot, its successors and assigns,
agrees, at its sole cost, risk and expense, to maintain said well in a useable
and workable condition and pay all electrical charges and other expenses
incident thereto; and further, should Jakobot elect to discontinue the use of
said well as a water injection well, Jakobot shall assign said well and all
equipment located thereon to Celebrity or its nominee.
9. Energex Farmin Acreage. The Farmout Agreement attached hereto as
Exhibit "B" grants to Energex the right to drill xxxxx on the 640-acre HBP Tract
and thereby earn an assignment to 80 acres surrounding each well which is
drilled and completed as a producer. At the present time Energex has drilled
one (1) well on acreage covered by the 640-acre HBP Tract, i.e. the Energex Lake
Pasture Well. Energex shall immediately upon the final execution of this
Agreement notify the Farmoutor that any assignment allocated to any well drilled
on the Farmout acreage should contain a reservation and conveyance in favor of
Celebrity of a production payment equal to $75,000.00 payable out of 1/8th of
8/8ths of all oil and gas produced from the acreage assigned for the drilling of
any such well. Energex agrees that no assignment of the above referred to
acreage shall be recorded unless such a production payment is provided for in
said assignment. In the event additional xxxxx are drilled on the 640-acre HBP
Tract, and Energex or its successors or assigns shall earn additional acreage by
virtue of the drilling same, any other assignment made by the Farmoutor to any
such party shall likewise contain a 1/8th of 8/8ths production payment until a
total of $75,000.00 (from all xxxxx combined) has been received by Celebrity.
10. Settlement Notice. Pedrie and Energex acknowledge that all disputes
among the parties are settled hereby, and Pedrie has simultaneously herewith
executed and delivered to Celebrity five (5) originals of a notice in the
following form:
Dated:
To Whom it May Concern:
This is to notify you that all disputes which have ever existed
among myself and/or Energex, Inc. and/or Energex Oil, Inc., and
Celebrity Entertainment, Inc. have been resolved to the satisfaction
of all parties.
11. Receivership. Celebrity, in Cause No. 97033 in the 000xx Xxxxxxxx
Xxxxx xx Xxxxxxxxxxx Xxxxxx, Xxxxx, filed an Application For The Appointment of
a Receiver to drill and operate a well on the Green Lease. Texas United
Geoproduction, Inc. was appointed Receiver and as Receiver has drilled the Texas
United Geoproduction #1 Green Well in the X. Xxxxxxx Survey, Abstract 161,
Xxxxxxxx County, Texas. Subsequent to the appointment of said Receiver and the
drilling of said well, Energex appealed the appointment of said Receiver to the
Court of Appeals, 11th Judicial District of Texas. Energex shall immediately
upon the execution of this Agreement by all parties file all papers and take all
steps necessary or desirable in order to withdraw said appeal.
12. Jakobot Deed of Trust. XXXXX X. JAKOBOT shall, upon the execution
of this agreement by all parties, execute and deliver to Celebrity a Release in
recordable form releasing the Deed of Trust dated October 15, 1996, from Energex
Oil, Inc., Grantor, to Xxxxxx X. Xxxx, Trustee, for the benefit of Xxxxx X.
Jakobot, said Deed of Trust being recorded in Volume 1327, page 178, of the
Official Public Records of Xxxxxxxx County, Texas.
13. Accounting Records. Energex and Pedrie agree to furnish to
Celebrity all accounting records, computer accounting programs, copies of
cancelled checks and other evidence of payment and monies received concerning
the Monterey Well and all geological, geophysical and seismic information in
their possession concerning the Green Lease. This information shall be
furnished within ten (10) days from the date this Agreement is executed by all
parties.
14. RELEASE. FOR THE CONSIDERATION OF THE SETTLEMENT OF ALL MATTERS IN
CONTROVERSY AS CONTEMPLATED HEREBY, ENERGEX OIL, INC. DBA ENERGEX, INC.,
XXXXXXX XXXX XXXXXX, FIRST AMERICAN OF BRECKENRIDGE, INC. D/B/A FIRST AMERICAN
OPERATING, XXXXX X. JAKOBOT, AND XXXXXX XXXXXXX JAKOBOT DO HEREBY RELEASE,
ACQUIT AND FOREVER DISCHARGE CELEBRITY ENTERTAINMENT, INC., XXXXX X. XXXXXXXX,
J. XXXXXXX XXXXXXX, TELEMATRIX, INC., XXXXXXX X. XXXXXX AND XXXXX X. XXXXXX,
THEIR SUCCESSORS, ASSIGNS, EMPLOYEES, DIRECTORS AND OFFICERS FROM ANY AND ALL
CAUSES OF ACTION, CLAIMS OR DEMANDS WHICH THEY MAY HAVE ON ACCOUNT OF, OR IN ANY
WAY GROWING OUT OF, OR ASSOCIATED WITH, ANY AND ALL CLAIMS OR DAMAGES, WHETHER
KNOWN OR UNKNOWN, WHICH RESULTED OR WHICH MAY RESULT FROM ANY AND ALL
TRANSACTIONS OR DEALINGS BETWEEN ENERGEX OIL, INC. DBA ENERGEX, INC., XXXXXXX
XXXX PEDRIE, FIRST AMERICAN OF BRECKENRIDGE, INC. D/B/A FIRST AMERICAN
OPERATING, XXXXX X. JAKOBOT, AND XXXXXX XXXXXXX JAKOBOT AND CELEBRITY
ENTERTAINMENT, INC. WITH REGARD TO ANY MATTER IN ANY WAY CONNECTED WITH THE
GREEN LEASE.
15. INDEMNITY. ENERGEX OIL, INC. DBA ENERGEX, INC., XXXXXXX XXXX
XXXXXX, FIRST AMERICAN OF BRECKENRIDGE, INC. D/B/A FIRST AMERICAN OPERATING,
XXXXX X. JAKOBOT, AND XXXXXX XXXXXXX JAKOBOT, JOINTLY AND SEVERALLY
("INDEMNITORS"), DO HEREBY UNDERTAKE AND AGREE TO INDEMNIFY AND SAVE HARMLESS
CELEBRITY ENTERTAINMENT, INC, ("INDEMNITEE"), ITS SUCCESSORS AND ASSIGNS AND THE
OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES OF CELEBRITY ENTERTAINMENT, INC. FROM
ANY AND ALL LIABILITY, DAMAGES OR CLAIMS WHICH CELEBRITY ENTERTAINMENT, INC., OR
ITS SUCCESSORS AND ASSIGNS, OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES, MAY
SUFFER AS A RESULT OF ANY CLAIMS, DEMANDS, COSTS, JUDGMENTS, ATTORNEY FEES OR
OTHER LIABILITIES, WHETHER KNOWN OR UNKNOWN AT THE TIME, AS A RESULT OF OR IN
ANY WAY CONNECTED WITH THE GREEN LEASE, INCLUDING, BUT NOT LIMITED TO, THE
PAYMENT OF ANY AND ALL BILLS, CHARGES, INVOICES, OR OTHER DEMANDS OR CLAIMS IN
ANY WAY ASSOCIATED WITH ANY WELL OR XXXXX DRILLED ON SAID LEASE, EXCEPT XXXXX
WHICH MAY BE IN THE FUTURE DRILLED BY CELEBRITY OR ITS SUCCESSORS AND ASSIGNS
AND THE TEXAS UNITED GEOPRODUCTION 01 GREEN WELL ABOVE REFERRED TO. ANY
LIABILITY UNDER THIS INDEMNITY ARRANGEMENT MAY BE SATISFIED BY CELEBRITY FROM
MONIES DUE TO THE INDEMNITORS ABOVE NAMED PURSUANT TO THE TERMS HEREOF, AND ANY
SUCH SUMS SO PAID SHALL BE OFFSET AGAINST THE MONIES OWED BY CELEBRITY TO SAID
PARTIES; HOWEVER, SUCH INDEMNITY SHALL NOT BE LIMITED IN AMOUNT TO THE SUMS
OWING BY CELEBRITY TO THE INDEMNITORS.
16. Additional Documents. The parties to this Agreement agree that
they, and each of them, shall willingly, at the request of any other party, or
his heirs, successors or assigns, execute, deliver and properly acknowledge
whatever additional instruments, documents, deeds, assignments or other papers
which may be required, desirable or necessary in order to carry out the
intention of this Agreement.
17. Binding Effect. This Agreement shall be binding upon and enure to
the benefit of the parties hereto and their respective heirs, devisees, legal
representatives, successors and assigns.
18. Texas Law. This Agreement shall be governed by the laws of the
State of Texas and all sums due and payable under the terms hereof shall be due
in Xxxxxx County, Texas.
19. Counterparts. It is expressly provided that this Agreement may be
executed in counterparts, but shall not be effective or binding upon any of the
parties hereto until all of the parties have executed the same.
IN WITNESS HEREOF, the parties hereto have executed this agreement
in triplicate originals on or as this the 3rd day of September, 1997.
CELEBRITY ENTERTAINMENT, INC.
By: /s/ J. Xxxxxxx Xxxxxxx
J. Xxxxxxx Xxxxxxx, Exec. Vice Pres.
ENERGEX OIL, INC. DBA ENERGEX, INC.
By: /s/ Xxxxxxx Xxxx Pedrie
Xxxxxxx Xxxx Xxxxxx, President
/s/ Xxxxxxx Xxxx Pedrie
Xxxxxxx Xxxx Xxxxxx
FIRST AMERICAN OF BRECKENRIDGE, INC.
D/B/A FIRST AMERICAN OPERATING
By: /s/ Xxxxx X. Jakobot
Xxxxx X. Jakobot, President
/s/ Xxxxx X. Jakobot
Xxxxx X. Jakobot
/s/ Xxxxxx Xxxxxxx Jakobot
Xxxxxx Xxxxxxx Jakobot
[Notarizations]
[Exhibits]
