FORM 10-QSB
U.S. Securities And Exchange Commission
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998.
OR
() TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________________________
to ___________________________________
Commission file no. 0-20760
PETRO UNION, INC. d/b/a HORIZONTAL VENTURES, INC.
(Exact name of small business issuer as specified in its
charter)
COLORADO 84-1091986
(State or other jurisdiction (I.R.S. Employer
of incorporation of organization) Identification No.)
575 Madison Avenue, Suite 1006
New York, NY 10022 10022
(Address of principal (Zip Code)
executive offices)
Issuer's telephone number, including area code: (212) 605-0470
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) has filed
all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the
Exchange Act after the distribution of securities under a plan
confirmed by court. Yes X No
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
dates:
Title of Each Class Outstanding at May 15, 1998
Common Stock, no par value 1,558,843 shares
Transitional Small Business Disclosure Format (check one):
Yes No X
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet as of March 31, 1998
(Unaudited)
Consolidated Statements of Operations for the
Three Months Ended March 31, 1998 and 1997 (Unaudited)
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1998 and 1997 (Unaudited)
Notes to Unaudited Consolidated Financial Statements,
March 31, 1998 and 1997 (Unaudited)
Item 2. Management's Discussion and Analysis.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PETRO UNION, INC. D/B/A HORIZONTAL VENTURES, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
March 31, 1998
(Unaudited)
CURRENT ASSETS:
<S> <C>
CASH AND CASH EQUIVALENTS $2,519,762
TIME DEPOSITS AND FUNDS
HELD IN ESCROW -
ACCOUNTS RECEIVABLE:
TRADE NET OF ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF
$74,092 19,307
OTHER -
_______________
TOTAL CURRENT ASSETS 2,539,068
_______________
PROPERTIES AND EQUIPMENT,
AT COST, NET OF ACCUMULATED
DEPRECIATION OF $636,794 7,165,815
_______________
OTHER ASSETS
DEPOSITS, PREPAYMENTS, AND
DEFERRED CHARGES 56,713
_______________
TOTAL OTHER ASSETS 56,713
_______________
TOTAL ASSETS $9,761,596
================
LIABILITIES AND OWNERS' EQUITY (DEFICIT)
LIABILITIES:
CURRENT LIABILITIES:
SHORT TERM NOTES PAYABLE $ -
CURRENT MATURITIES OF
LONG TERM NOTES 21,782
ACCOUNTS PAYABLE AND
ACCRUED EXPENSES 55,311
OTHER CURRENT LIABILITIES -
CUSTOMER PAYMENTS RECEIVED IN ADVANCE -
________________
TOTAL CURRENT LIABILITIES 77,093
________________
NONCURRENT LIABILITIES:
LONG TERM NOTES PAYABLE, NET
OF CURRENT MATURITIES 53,151
________________
TOTAL NONCURRENT LIABILITIES 53,151
_________________
TOTAL LIABILITIES 130,245
_________________
COMMITMENTS AND CONTINGENCIES -
OWNERS' EQUITY (DEFICIT):
COMMON STOCK, NO PAR VALUE,
50,000,000 SHARES AUTHORIZED,
1,558,843 SHARES ISSUED AND
OUTSTANDING 11,672,519
CAPITAL IN EXCESS OF PAR VALUE
ACCUMULATED DEFICIT (2,041,168)
________________
TOTAL OWNERS'
EQUITY (DEFICIT) 9,631,352
_________________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $9,761,596
==================
</TABLE>
The accompanying notes are an integral part of these statements.
PETRO UNION, INC. D/B/A HORIZONTAL VENTURES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTON>
THREE MONTHS
ENDED MARCH 31
1998 1997
<S> <C> <C>
REVENUE 34,689 103,318
COST OF REVENUE 34,172 75,900
GROSS PROFIT 516 27,418
GENERAL AND
ADMINISTRATIVE
EXPENSES 393,415 113,089
INCOME (LOSS) FROM
OPERATIONS (392,899) (85,671)
OTHER INCOME
(EXPENSES) 34,594 7,844
INCOME (LOSS)
BEFORE TAXES ON
INCOME (358,304) (77,827)
PROVISION FOR INCOME
TAXES - -
NET INCOME
(LOSS) (358,304) (77,827)
NET EARNINGS
(LOSS) PER
COMMON SHARE $(0.23) $(0.10)
AVERAGE SHARES
OUTSTANDING USED
FOR COMPUTATION OF
EARNINGS (LOSS)
PER SHARE 1,558,843 759,460
</TABLE>
The accompanying notes are an integral part of these statements.
PETRO UNION, INC. D/B/A HORIZONTAL VENTURES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1998 1997
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S> <C> <C>
NET (LOSS) (358,304) (77,827)
ADJUSTMENTS TO RECONCILE NET
LOSS TO CASH PROVIDED (USED)
BY OPERATIONS:
DEPRECIATION, DEPLETION
AND AMORTIZATION 38,868 53,418
CHANGE IN ACCOUNTS RECEIVABLE 377 (47,356)
CHANGE IN INTERESTS
RECEIVABLE 3,271
CHANGE IN PAYMENT IN ADVANCE (2,341) -
CHANGE IN ACCOUNTS PAYABLE (218,233) 52,114
CHANGE IN OTHER LIABILITIES (525,000) 39,507
NET CASH (USED) BY
OPERATING ACTIVITIES (1,061,361) 19,856
CASH FLOWS FROM INVESTING ACTIVITIES:
(INCREASE) IN PROPERTY AND
EQUIPMENT (409,836) 81,249
INCREASE IN DEPOSITS (2,200) -
NET CASH (USED) BY
INVESTING ACTIVITIES (412,036) 81,249
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM CAPITAL
STOCK COMMON 84,446 -
REPAYMENT OF NOTES PAYABLE (23,934) (79,107)
NET CASH PROVIDED BY
FINANCING ACTIVITIES 60,512 (79,107)
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS (1,412,886) 21,998
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 3,932,647 6,458
END OF PERIOD 2,519,761 28,456
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (1,412,886) 21,998
</TABLE>
The accompanying notes are an integral part of these statements.
PETRO UNION, INC. dba HORIZONTAL VENTURES, INC.
Notes to Unaudited Consolidated Financial Statements
March 31, 1998 and 1997
(Unaudited)
NOTE 1 - THE COMPANY:
Petro Union, Inc., dba Horizontal Ventures, Inc., is engaged in
thedevelopment of oil and gas properties for its own account
and the contract drilling of oil and gas wells. The Company
intends to officially change its name to Horizontal Ventures,
Inc. when approved by shareholders at its next shareholders
meeting.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of presentation - The consolidated financial statements
include the accounts of Petro Union, Inc., and its wholly owned
subsidiaries, Horizontal Ventures, Inc. and Calox, Inc. All
significant intercompany accounts and transactions have been
eliminated.
The results for the interim periods are not indicative of the
results of operations that may be expected for the fiscal year.
In the opinion of management, the information furnished reflects
all adjustments necessary (which are of a normal recurring
nature) for a fair presentation of the Company's financial
position as of March 31, 1998, and the results of
its operations and cash flows for the periods ended March 31,
1998 and 1997.
The financial statements for the interim periods have been
prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations.
The financial statements presented herein should be read in
conjunction with the financial statements for the year ended
December 31, 1997 included in the Company's 1997 Form 10-KSB.
The Company, Petro Union, Inc. ("PUI") was a debtor in possession
under Chapter 11 of the U.S. Bankruptcy Code until August 28,
1997, at which time the Bankruptcy Court approved its plan of
reorganization. As a part of its plan of reorganization, PUI
agreed to acquire all the outstanding stock of Horizontal
Ventures, Inc. ("HVI"). The acquisition of HVI was completed on
September 9, 1997, and after the acquisition, HVI shareholders
owned more than 50% of the outstanding shares of PUI. Pursuant
to the rules of the Securities and Exchange Commission, the
transaction has been accounted for as a "reverse merger."
Accordingly, the accompanying consolidated statements of
operations and consolidated statements of cash flows reflect the
historical operations and cash flows of HVI (including those of
PUI after September 9, 1997, the effective date of the merger),
whereas previous quarterly reports filed by the Company reflected
operations and cash flows of PUI.
Certain reclassifications have been made to the 1997 amounts to
conform to the 1998 presentation.
Earnings per share - Earnings per share have been calculated
based on 1,558,843 Shares, the average number of shares
outstanding during the first quarter of 1998.
NOTE 3 - CONTINGENCIES:
At September 30, 1997, the Company was the plaintiff in a lawsuit
against David J. LaPrade, a shareholder, former officer and
director, and an organizer of the Company, and Mr. LaPrade's
current employer. The Company seeks to recover losses from
alleged breach of fiduciary duty, misappropriating confidential
information and property of the Company, using it in unfair
competition with the Company, interfering with the Company's
existing and prospective relationships with its customers,
interfering with the Company's relationships with its employees,
and conversion of Company property. Mr. LaPrade has made
counterclaims against the Company for breach of his employment
agreement, libel and slander, and intentional infliction of
emotional distress; he seeks actual damages in excess of $10,000
and punitive damages in an unspecified amount. Management
believes that its claims against Mr. LaPrade will be successful
and that it will recover damages; moreover, management believes
that Mr. LaPrade's counterclaim will not result in a material
liability to the company. The accompanying financial statements
do not include provision for any loss which might result from Mr.
LaPrade's counterclaim, nor do they include any asset that might
result from the Company's claims against Mr. LaPrade.
PART I (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
Overview
The Company's final accounting of the bankruptcy case was
accepted and case closed by the Southern District Court of
Indiana on March 26th, 1998. This marked the end of almost a year
of re-structuring by the Company. Management spent considerable
amount of its time in this process and intends to now focus on
implementing its business strategy hereon.
The results of the first quarter, as planned, relate to the
Company's internal drilling program in California and thus
reflect the investment phase. The Company drilled three
horizontal wells namely, UCB-09, UCB-38 and UCB-28. Each well was
drilled successfully utilizing the Company's Short radius
technology and resulted in a 47 ft radius with a 435 ft lateral
on UCB-09, a 60ft radius with a 414 ft lateral on UCB-38 and a
50ft radius with a 252ft lateral on UCB-28. In view of the
Company's long-term strategy and the known sand problem in the
Cat Canyon basin, the Company completed each well with a
different technique to establish the standard. UCB-09 was
completed with a standard Ace down-hole pump and a KD system;
UCB-38 with a KUDU pump while UCB-28 was completed with a Ace
Teflon-Luber Plunger down-hole pump. Each of the wells kick-off
point (KOP) was at a depth of 2940-3000 ft.
The variances in the completions proved to be extremely
successful as the Company attained direct experience on the
production capability from each of the techniques. UCB-09
production stabilized at 20 BOPD, UCB-38 got sanded up following
few weeks of production while UCB-28 produces a net of 65 BOPD.
Each of these wells were re-entries into an abandoned well bore
in the Sisquoc formation which is one of the two pay zones within
the Company's lease in the Cat Canyon basin. Following this
successful drilling operation and completion technique
definition, the Company will resume its drilling program early in
the fourth quarter to achieve its 500 BOPD objective by year-end.
The sharp decline (40%) in the oil prices during the first quarter had a
negative effect on the revenues. As the Company's stabilized lifting costs are
under $4 per barrel the Cat Canyon operation continues to be profitable.
The Company re-organized its management team at the end of the quarter to
better poise itself in implementing its two-prong (exploitation and contract
drilling) business strategy. The Evansville offices were closed in late April
and all operations are now based in Tulsa in an effort to G&A and consolidate
operations. A full-time marketing professional with extensive sales experience
within the oil service industry was added in April to focus on re-starting the
horizontal drilling contract services that had essentially been dormant during
the re-structuring phase. The Company is currently in discussions with three
majors, five independents and one major international company concerning
providing contract service work and expects to be drilling late second / early
third quarter.
As per the Company's business strategy, management is actively pursuing
acquisitions and currently is involved in the first phase due diligence on
one. Management expects to complete its first acquisition in the late
second/early third quarter. The acquisition, if completed, will add
production, drilling sites and cash flow to the Company is expected to
positively effect liquidity.
In view of the vast differences between the Company's structure in the first
quarter of 1997 and that of this year, the operations results comparisons are
considered to be irrelevant by management. The liquidity comparisons reflect
the successful re-structuring process accomplished by the management over the
last nine months. The management does not foresee any additional capital
requirements to continue its on-going operations through next year.
This Quarterly Report on Form 10-QSB includes certain statements that may
be deemed to be "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements, other than statements of
historical facts, included in this Form 10-QSB that address activities, events
or developments that the Company expects, believes or anticipates will or may
occur in the future, including such matters as future capital, development, and
exploration expenditures (including the amount and nature thereof), drilling of
wells, reserve estimates(including estimates of future net revenues associated
with such reserves and the present value of such future net revenues), future
production of oil and gas, repayment of debt, business strategies, expansion
and growth of the Company's operations and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions, expected future developments and
other factors it believes are appropriate in the circumstances. Such statements
are subject to e number of assumptions, risks and uncertainties, general
economic and business conditions, the business opportunities (or lack thereof)
that may be presented to and pursued by the Company, changes in laws or
regulations and other factors, many of which are beyond the control of the
Company. Readers are cautioned that any such statements are not guarantees of
future performance and that actual results or developments may differ materially
from those projected in the forward-looking statements.
Results of Operations
Revenues decreased from $103,318 in first quarter of 1997 to $34,689 in the
first quarter of 1998. All 1998 revenues were from oil production at the
recently acquired field in California. Oil prices drop of 40% coupled with the
El Nino storms that essentially shut the field down during February caused the
revenues to be lower than initially projected. Furthermore, two of the three
horizontal wells drilled by the Company attributed to 20% of the total
production as they were put on production late in the quarter. The Company is
to commence its contract drilling activities in the second quarter following
over a year of not promoting its services during the corporate restructuring
process.
The Cost of Sales decreased from $75,900 in the first quarter of 1997 to
$34,172 in first quarter of 1998. Planned drilling operations in California
account for all of the expenses and are not proportional to the revenues, as
the three horizontal wells drilled were not in production during the entire
quarter. Additionally, there was considerable El Nino created remedial repair
expenses incurred during the month of February.
The General and Administration expenses increased from $113,089 in the first
quarter 1997 to $393,415 in the first quarter of 1998. 43% of the expenses
were related to payroll. 20% of the expenses were related to legal, accounting
and consultant fees primarily involved with year-end reporting and filing
requirements. General and Administration expenses are expected to remain
relatively consistent with the start-up of the contract drilling operations in
the upcoming quarters.
Liquidity and Capital Resources
At the end of the first quarter, the Company's liquid assets consisting of
cash and cash equivalents were $2,519,761 while the current liabilities were
$77,093. The $1,412,886 decrease in working capital from the Company's three
well drilling program in its Cat Canyon field in California and the final
payment on the Cat Canyon field. Additionally, the Company settled its lawsuit
with Mr. Gwartney for $25,000. Long term liabilities were at $53,151.
The Company expects the current liquidity to be sufficient to support the on-
going operations through next year without any additional funding
requirements.
Inflation
The Company does not believe that inflation will have a material impact on the
Company's future operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
At September 30, 1997, the Company was the plaintiff in a lawsuit
against David J. LaPrade, a shareholder, former officer and
director, and an organizer of the Company, and Mr. LaPrade's
current employer.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
10.6 Richard D. Wedel Termination Agreement
(b) Reports on Form 8-K
During the quarter for which this report is filed,
the Company filed the following reports on Form 8-K:
Current Report on Form 8-K dated January 15,1998 filed on January
20, 1998 which reported events under Item 9, Sale of
Equity Securities Pursuant to Regulation S.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
PETRO UNION, INC. D/B/A HORIZONTAL VENTURES, INC.
Date: May 15, 1998 /S/ RANDEEP S. GREWAL
Randeep S. Grewal, Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,465,007
<SECURITIES> 1,054,755
<RECEIVABLES> 93,399
<ALLOWANCES> (74,092)
<INVENTORY> 0
<CURRENT-ASSETS> 2,539,068
<PP&E> 7,802,609
<DEPRECIATION> (636,794)
<TOTAL-ASSETS> 9,761,596
<CURRENT-LIABILITIES> 77,093
<BONDS> 77,086
0
0
<COMMON> 11,672,519
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,761,596
<SALES> 34,689
<TOTAL-REVENUES> 69,283
<CGS> 34,172
<TOTAL-COSTS> 34,172
<OTHER-EXPENSES> 393,415
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (358,304)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (358,304)
<EPS-PRIMARY> (.23)
<EPS-DILUTED> (.23)
</TABLE>
Exhibit 10.6
TERMINATION AND SETTLEMENT AGREEMENT
This Termination and Settlement Agreement and Complete Release
("Agreement") is entered into between Petro Union, Inc. d/b/a Horizontal
Ventures, Inc. (the "Company") and Richard D. Wedel ("Wedel") and relates to
the resignation by Wedel of his Executive Employment Agreement with the
Company and as a member of the Board of Directors.
In consideration of the mutual promises set forth below and the good and
valuable consideration, the Company and Wedel agree as follows:
1. Consideration to Wedel . The consideration to be delivered to
Wedel shall include the payment of $50,000 as a one-time severance payment
which shall be payable on or before April 1, 1998 in cash. Additionally, the
Company shall issue a loan to Wedel in the amount of $100,000 with interest
payable at the prime rate as established by the Wall Street Journal upon the
date of the execution of this agreement (8.5%), payable in full, including
both principal and interest six months from the date of this agreement in a
single balloon payment. The loan shall be collateralized by a stock pledge
agreement and 10,000 shares of Petro Union, Inc. d/b/a Horizontal Ventures,
Inc. common shares in the name of Wedel which shall be delivered to the
Company along with the stock pledge agreement upon receipt of the $100,000.
Additionally, the Company shall maintain Wedel's medical insurance coverage as
currently in effect through July 31, 1998.
2. Consideration to the Company. In exchange for the consideration
to be received by Wedel, Wedel agrees to not on his own or engage in any
employment with or own more than 5% interest as a shareholder in any Company,
or in any other manner, compete with the Company's Amoco technology based
horizontal drilling business for a period of three years from the date of this
agreement. This non-compete is not intended to otherwise restrict Wedel's
ability to be gainfully employed in the oil and gas business or to operate his
own business so long as he does not utilize the Amoco technology except
through the payment for services at market rates for that technology directly
to the Company. This non-compete agreement includes the agreement not to
interfere with or attempt to hire any of the Company's employees.
Additionally, Wedel shall vote any and all common shares owned by him in the
Company for a period of one year in accordance with instructions received from
the Company's Board of Directors on all matters brought to a vote of
shareholders.
3. Registration and Other Stock Rights of Wedel. The Company agrees
to file a registration statement to register the resale of all restricted
Company shares owned by Wedel and members of his immediate family on or before
April 30, 1998 and use best efforts to have that registration statement
declared effective at the earliest practical date. Additionally, the Company
will assist Wedel and his immediate family members in removing restrictive
legends on shares not registered without cost to Wedel as legend removal is
available to him under Rule 144.
4. Protection of Confidential Information and Trade Secrets. Wedel
agrees that he will not disclose or use any of the confidential information,
patents and trade secrets (including but not limited to information pertaining
to corporate restructuring efforts, project marketing information, including
cost and pricing information, sales figures, projections or estimates,
customer lists and any other non-public information) of the Company which he
acquired as a result of his employment. Wedel agrees that the Company's
confidential information, trade secrets and customer accounts are valuable
interests in need of protection, that his agreements in this paragraph are not
broader than necessary to protect such interests, and that the Company's need
for protection of these interests outweighs any hardship that Wedel's
agreements in this paragraph will have upon him.
5. Complete Release. The parties agree to release and forever hold
harmless each other their affiliated or related companies, and all the owners,
partners, stockholders, members, predecessors, successors, trustees, assigns,
agents, employees, officers, directors, representatives, attorneys, divisions,
subsidiaries, affiliates, holding companies, and parent companies of any of
them ("Releasees"), from all claims or demands, whether known or unknown,
which each may have against the Releasees, including but not limited to, any
such claims or demands they may have based on Wedel's Executive Employment
Agreement with the Company. This includes a release of any rights or claims
Wedel may have under the Age Discrimination in Employment Act, Title VII of
the Civil Rights Act of 1991, the Americans With Disabilities Act, the
Employee Retirement Income Security Act (ERISA), the Equal Pay Act, or any
other federal , state or local laws or regulations. This also includes a
release of any claims for wrongful discharge, breach of express or implied
contract, breach of express or implied covenant of good faith and fair
dealing, and any tort claims. This release also includes any claim arising
from any alleged negligent or grossly negligent conduct on the part of either
party or the Releasees. Both parties agree never to file a lawsuit asserting
any claims that are released hereby. The Company and Wedel agree that they
are entering into this Agreement to resolve any differences that may exist
between them and to avoid litigation and buy peace. By entering into this
Agreement, neither party admits any liability or wrongdoing. Both parties
agree that if either breaks its promise herein and files a lawsuit based on
legal claims that are released hereby, he will indemnify the other party and
any of the Releasees, for all costs, losses, or judgments incurred by them,
including reasonable attorneys' fees and disbursements incurred in defending
against such claim.
6. Agreement to be Confidential. Wedel agrees that he will keep the
terms, amount and fact of this Agreement completely confidential, and that,
unless required to do so by law, he will not disclose any information
concerning this Agreement to anyone (other than his attorneys and his
accountant, all of whom shall be subject to this confidentiality provision),
including but not limited to any past, present, future or prospective employee
or applicant for employment with the Company or any related company.
7. Cooperation by Wedel. Wedel agrees to make himself reasonably
available to the Company in the future to consult with management and their
attorneys on any project and/or issues outstanding at the time of his
termination to assist in the transition. The Company agrees to pay any
reasonable expense of Wedel in this regard and pay a per diem therefore.
8. Arbitration. Any dispute which arises as a result of this
Termination and Settlement Agreement or as a result of any instruments
including notes or pledge agreements which arise as a result of this
agreement, shall be submitted to binding arbitration in the city and state of
New York pursuant to the rules then pertaining as established by the American
Arbitration Association and any award granted as a result of said arbitration
may include attorneys' fees and court costs to the prevailing party. Any
award shall be enforceable pursuant to the Uniform Arbitration Act through any
court of competent jurisdiction.
PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS.
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, THAT I
UNDERSTAND ALL OF ITS TERMS, AND THAT I AM ENTERING INTO IT VOLUNTARILY.
I FURTHER ACKNOWLEDGE THAT I AM AWARE OF MY RIGHT TO CONSULT WITH A
PRIVATE ATTORNEY OF MY CHOICE OR A REPRESENTATIVE OF A FEDERAL, STATE OR LOCAL
GOVERNMENT AGENCY, AND AFFIRM THAT I HAVE AVAILED MYSELF OF THIS RIGHT TO THE
FULL EXTENT, IF ANY, THAT I DESIRED.
PETRO UNION, INC. d/b/a
HORIZONTAL VENTURES, INC.
/s/ Richard D. Wedel /s/ Randeep Grewal
________________________________ By:______________________________
Richard D. Wedel Randeep Grewal, Chief Executive Officer
3/12/98 3/12/98
Date:____________________________ Date:_____________________________
