PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is made effective this 20th day
of December, 1999 ("Effective Date") by and between Power Exploration, Inc.
("Power"), a Nevada corporation with a principal office at 0000 Xxxxxxxxxx,
Xxxxx 000, Xxxx Xxxxx, Xxxxx, and Benchmark Equity Group, Inc. ("Benchmark") a
Delaware corporation with a principal office at 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxx,
with respect to the following:
RECITALS
WHEREAS, contemporaneous with the execution of the within Agreement,
the parties hereto, together with Xxxx Oil Properties, Inc. ("Xxxx") and Xxxxxxx
X. Xxxx ("Tomz"), have executed a Mutual Release and Compromise Settlement
Agreement ("Release") the terms of which Release are incorporated herein by
reference for all purposes;
WHEREAS, pursuant to the terms of the Release the parties hereto,
together with Xxxx and Tomz, are thereby compromising disputed issues arising
between Power and Benchmark; and
WHEREAS, as part of the consideration for the Release the parties
hereto are hereby entering into the within Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Power and Benchmark
agree as follows:
1. Purchase of Stock as Consideration for Release.
Upon the terms and conditions contained herein, Power agrees to sell,
and Benchmark agrees to buy, Five hundred thousand (500,000) shares of Power's
common stock ("Stock" or "Shares") restricted pursuant to Rule 144 of the
Securities Act of 1933 (the "Act"), in exchange for the mutual promises,
covenants and agreements set forth in the Release. Power common stock has traded
in over the counter trading on the electronic bulletin board at between $2.50
and $8.25 during the ninety day period ending on January 25, 2000.
2. Delivery of Stock.
Benchmark hereby acknowledges delivery and receipt of the Stock.
3. Representation and Warranties of Benchmark:
a. Benchmark is acquiring the Shares for its own account and not
with a view to any distribution within the meaning of the
Securities Act of 1933, as amended (the "Act"). Benchmark
acknowledges that it has been advised and is aware that (i)
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Power is relying upon an exemption under the Act predicated
upon Benchmark's representations and warranties contained in this
Agreement, and (ii) the Shares issued to Benchmark pursuant to
this Agreement will be "restricted stock" within the meaning of
the rules and regulations (the "Rules") promulgated by the United
States Securities and Exchange Commission ("SEC") pursuant to the
Act. Unless, and until, the Shares are registered under the Act,
they will be subject to limitations upon resale set forth in the
Rules or in other administrative interpretations by the SEC in
effect at the time of the proposed sale or other disposition.
b. Benchmark has received all of the information i considers
necessary or appropriate for determining whether to purchase the
Shares. Benchmark is familiar with the business, affairs, risks
and properties of Power. Benchmark has had an opportunity to ask
questions of and receive answers from Power, and its officers,
directors and other representatives regarding Power and the terms
and conditions of the offering of the Shares. Benchmark has had
the opportunity to obtain any additional information Power
possesses or could acquire without unreasonable effort or
expense, necessary to verify the accuracy of the information
furnished.
c. Benchmark has such knowledge and expertise in financial and
business matters that it is capable of evaluating the merits and
substantial risks of an investment in the Shares and is able to
bear the economic risks relevant to the purchase of the Shares
hereunder.
d. Benchmark is relying solely upon independent consultation with
its professional, legal, tax and accounting advisors and such
others as Benchmark deems to be appropriate in purchasing the
Shares; Benchmark has been advised to, and has consulted with,
its professional tax and legal advisors with respect to any tax
consequences of investing in Power.
e. Benchmark recognizes that an investment in the securities of
Power involves substantial risk and understands all of the risk
factors related to the purchase of the Shares.
f. Benchmark understands that there may be no market for the
Shares.
g. Benchmark's financial condition is such that Benchmark is
under no present or contemplated future need to dispose of any
portion of Shares to satisfy any existing or contemplated
undertaking, need or indebtedness.
h. Without in any way limiting the representation set forth
above, Benchmark further agrees not to make any disposition of
all or any portion of the Shares unless and until:
(1) There is then in effect a registration statement under the
Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE
33
(2) Benchmark shall have notified Power of the proposed
disposition and shall have furnished Power with a detailed
statement of the circumstances surrounding the proposed
disposition, and if requested by Power, Benchmark shall have
furnished Power with an opinion of counsel, reasonably
satisfactory to Power and its counsel, that such disposition
will not require registration under the Act.
i. It is understood that the certificates evidencing the Shares
will bear substantially the following legends:
"The securities evidenced hereby have not been registered under
the Securities Act of 1933, as amended (the "Act") nor qualified
under the securities laws of any states, and have been issued in
reliance upon exemptions from such registration and qualification
for nonpublic offerings. Accordingly, the sale, transfer, pledge,
hypothecation, or other disposition of any such securities or any
interest therein may not be accomplished except pursuant to an
effective registration statement under the Act and qualification
under applicable State securities laws, or pursuant to an opinion
of counsel, satisfactory in form and substance to Power, to the
effect that such registration and qualification are not
required."
j. Benchmark confers full authority upon Power (i) to instruct
its transfer agent not to transfer any of the Shares until it has
received written approval from Power and (ii) affix the legend in
subparagraph (i) above to the face of the certificate or
certificates representing the Shares.
k. Benchmark understands that Power is relying upo Benchmark's
representations and warranties as contained in this Agreement in
consummating the sale and transfer of the Shares without
registering them under the Act or any law. Therefore, Benchmark
agrees to indemnify Power against, and hold it harmless from, all
losses, liabilities, costs, penalties and expenses (including
attorney's fees) which arise as a result of a sale, exchange or
other transfer of the Shares other than as permitted under this
Agreement. Benchmark further understands that Power will make an
appropriate notation on its transfer records of the restrictions
applicable to these Shares.
4. Representations and Warranties of Power. Power represents and warrants
that:
a Power is a corporation duly organized, validly existing under the laws
of the State of Nevada.
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE
34
b. Power has all necessary corporate power and authority under the laws
of Nevada and all other applicable provisions of law to own its
properties and other assets now owned by it, to carry on its business
as now being conducted, and to execute and deliver and carry out the
provisions of this Agreement.
c. All corporate action on the part of Power required for the lawful
execution and delivery of this Agreement and the issuance, execution
and delivery of the Shares has been duly and effectively taken. Upon
execution and delivery, this Agreement will constitute a valid and
binding obligation of Power, enforceable in accordance with its terms,
except as the enforceability may be limited by applicable bankruptcy,
insolvency or similar laws and judicial decisions affecting creditors'
rights generally.
5. Survival of Representations, Warranties and Covenants. The representations,
warranties and covenants made by Power and Benchmark in this Agreement
shall survive the purchase and sale of the Shares.
6. Transfer Agent Instructions. Power's transfer agent will be instructed to
issue one or more stock certificates representing the Stock set forth in
Section 1 above, with the restrictive legend set forth in Section 3 above,
in the name of Benchmark and will be advised that the Shares have been
issued pursuant to Rule 144 of the Securities Act of 1933. Power further
warrants that no stop transfer instructions other than instructions to
issue the Shares will be given to its transfer agent and that these Shares
shall be freely transferable on the books and records of Power, subject to
compliance with applicable securities laws and the restrictions set forth
herein.
7. Stock Delivery Instructions. Benchmark hereby acknowledges receipt of the
share certificates evidencing the Stock.
8. Governing Law. This Purchase Agreement shall be governe by and interpreted
in accordance with the laws of the State of Texas, without regard to its
law on the conflict of laws and any dispute arising hereunder shall be
brought in a court of competent jurisdiction in Tarrant County, Texas.
9. Miscellaneous.
A. Notices. Any notice under this Agreement shall be deemed to have been
sufficiently given if sent by registered or certified mail, postage
prepaid, addressed as follows:
To the attention of the President at the address first indicated above
for the respective entity, or any new address which the parties hereto
may hereafter designate by notice. All notices shall be deemed to have
been given as of the date of receipt.
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE
35
B. Entire Agreement. This instrument and the Release set forth the entire
agreement between the parties hereto and no prior or contemporaneous
written or oral statement or agreement shall be recognized or
enforced.
C. Severability. If a court of competent jurisdiction determines that any
clause or provision of this Agreement is invalid, illegal or
unenforceable, the other clauses and provisions of the Agreement shall
remain in full force and effect. The clauses and provisions which the
Court determines are void, illegal or unenforceable shall be limited
so that they remain in effect to the extent permissible by law.
D. Assignment. Neither party hereto may assign this Agreement without the
express written consent of the other party. However, if the other
party consents to the assignment such assignment will be binding and
inure to the benefit of the assignee.
E. Waiver of Jury Trial. To the extent permitted by law, the parties
hereby irrevocably waive a jury trial in the event of litigation. The
parties included this provision because of the cost and delay of a
jury trial and because the parties believe that a jury trial would not
be necessary to resolve any dispute or claim between them.
F. Attorney's Fees. If either party institutes legal action or other
proceedings (including, but not limited to, arbitration) to enforce or
to declare any right or obligation under this Agreement or as a result
of a breach, default or misrepresentation in connection with any of
the provisions of this Agreement, or otherwise because of a dispute
among the parties, the successful or prevailing party will be entitled
to recover reasonable attorney's fees. Attorney's fees shall include
fees for appeals, collections and other expenses incurred in such
action or proceeding. Legal fees shall be awarded in addition to any
other relief to which the prevailing party may be entitled.
G. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer any rights or remedies upon any person
other than the parties hereto and their successors.
H. Further Assurances. At any time and from time to time, after the date
of this Agreement, each party hereto will execute such additional
instruments and take such actions as are reasonably necessary to
confirm or perfect title to the Shares or otherwise to carry out the
intent and purposes of this Agreement.
I. Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right or remedy at law, or in equity, and
may be enforced concurrently herewith. No waiver by any party of the
performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time, this Agreement may be
amended by a writing signed by both parties hereto. Any term or
condition of this Agreement may be waived or the time for performance
hereof may be extended by a writing signed by the party or parties for
whose benefit the provision is intended.
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J. Headings. The section and subsection headings in this Agreement are
inserted for convenience only. In the event of a conflict between a
heading and the text of this Agreement, the text shall control the
meaning and interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
DATED this 20th day of December, 1999.
POWER EXPLORATION, INC.
By: /s/Xxx Xxxx Xxxxxxx
----------------------
Printed Name: Xxx Xxxx Xxxxxxx
Title:President
BENCHMARK EQUITY GROUP, INC.
By: /s/ Xxxxx XxXxxx
-------------------
Printed Name: Xxxxx XxXxxx
Title: CEO
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