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STOCK PURCHASE AGREEMENT
This Agreement is made effective as of the 31st day of December, 1998
(the "Effective Date") between United States Exploration, Inc., a Colorado
corporation ("Seller"), and Xxxxxxxx X. Xxxxxx ("Buyer").
Seller owns 10,000 shares of the common stock of Pacific Osage, Inc.
("Pacific") and 1,000 shares of the common stock of Performance Petroleum Co.
("Performance") constituting all of the issued and outstanding common stock of
each such corporation (the "Shares"). Seller has agreed to sell the Shares to
Buyer on the following terms:
1. Purchase Price. The purchase price for the Shares is $650,000. The
purchase price shall be paid by wire transfer to the Seller, and the Seller
shall deliver the certificates representing the Shares, duly endorsed for
transfer to the Buyer, upon the execution of this Agreement.
2. Distribution of Certain Properties. Buyer acknowledges that,
immediately prior to the transfer of the Shares to Buyer, Performance
transferred to Seller all of its oil and gas interests in Logan, Noble and Xxx
Counties, Oklahoma, and all tangible and intangible assets related to such oil
and gas interests.
3. Certain Assets at Barnsdall Yard.
(a) Buyer acknowledges that the five pumping units located at
Pacific's yard in Barnsdall, Oklahoma which are described in Exhibit A hereto
belong to Xxxxxx Mineral Group, Inc. and that Xxxxxx Mineral Group, Inc. has the
right to store those pumping units at their present location in that yard for up
to one year after the date hereof without any payment to Pacific. Buyer will
cause Performance and Pacific to honor that right.
(b) Buyer acknowledges that the furniture (or equivalent furniture),
geological data and equipment used by Xxxxx Xxxxxxx in his offices in the
Barnsdall facility are owned by Seller and not by Performance or Pacific. Seller
shall have the right to leave such furniture, geological data and equipment in
an office in the Barnsdall facility for up to one year after the date of this
Agreement. During that period, Xxxxx Xxxxxxx or another employee of Seller shall
be allowed access to the Barnsdall facility so that he can continue to work in
that facility on a daily basis with heat, electricity and sanitary facilities
provided by Performance.
(c) Seller acknowledges that the 6" line pipe stored in the
Barnsdall yard belongs to United States Gas Gathering, Inc. and is not an asset
of Pacific or Performance. Buyer agrees to cause Pacific to give United States
Gas Gathering, Inc. a reasonable time to remove the pipe from that yard or to
make arrangements with Buyer for the continued storage thereof.
(d) Seller has certain records stored in the Barnsdall facility.
Buyer agrees that Seller may continue to store those records in their current
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current location at that facility for up to a year after the date of this
Agreement, without payment of any storage or other charges. Buyer shall cause
Pacific to comply with that agreement.
(e) If Buyer sells or closes the Barnsdall facility within one year
after the date of this Agreement, Buyer shall notify Seller of the pending sale
or closure at least 30 days prior to the expected closing of such sale or the
closure of the facility to allow Seller time to make arrangements for the
physical transfer of the records, the pumping units and the furniture,
geological data and equipment. Seller shall complete such transfer by the end of
the 30-day period and shall thereafter have no further rights under this Section
3.
4. Representations and Warranties of Seller. Seller represents and
warrants to Buyer, that to the best of Seller's knowledge, (a) there are no
actions, suits, proceedings or investigations pending or threatened against
Pacific or Performance, (b) neither Pacific nor Performance has received any
notice from any governmental agency or private party alleging any violation by
it of any applicable environmental law or any obligation on its part to conduct
or pay for any remediation under applicable environmental laws, except such as
have been fully resolved, and (c) at the Effective Date, the current assets of
Pacific and Performance were approximately equal to their current liabilities.
For that purpose, the knowledge of the Seller shall mean the actual knowledge of
its current officers.
5. Representations, Warranties and Covenants of Buyer. Buyer represents
and warrants to and agrees with Seller as follows:
(a) Buyer is familiar with the assets and operations of
Performance and Pacific and has had access to all material information
concerning Performance and Pacific. Buyer has such knowledge and experience in
financial and business matters generally and in particular in the businesses in
which Pacific and Performance are engaged, to be able to assess the merits and
risks of the purchase of the Shares. Buyer acknowledges that the Shares have not
been registered under the Securities Act of 1933, as amended (the "Act") or the
securities laws of any state and cannot be offered or sold by Buyer unless
subsequently so registered or unless exemptions from the registration
requirements of the Act and all applicable state securities laws are available
for the transaction. Buyer agrees not to offer or sell the Shares or any portion
thereof except in compliance with all applicable laws. Buyer acknowledges that
the certificates representing the Shares will bear legends reflecting the
restrictions on transferability arising under the securities laws. Buyer is
purchasing the Shares for his own account, for investment and with no view to
the distribution thereof.
(b) Buyer shall indemnify Seller against any loss, liability,
cost or expense (including reasonable attorneys' fees) arising out of or
relating to the operations or assets of Pacific or Performance after the date
hereof.
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6. Governing Law. This Agreement shall be governed in all respects by
the laws of the state of Colorado.
United States Exploration, Inc.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
/s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
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