AGREEMENT
AGREEMENT
This
Agreement is entered into between United
Heritage Corporation
and
UHC
New Mexico Corporation
(collectively “UHC”), and Lothian
Oil, Inc. (“Lothian”).
It shall be deemed effective for all purposes as of June 6, 2007 (the “Effective
Date”).
BACKGROUND
UHC
owned
oil and gas properties in New Mexico (the “Cato Properties”). Lothian and UHC
entered into a Credit Agreement, which was amended, extended, and renewed,
providing for Lothian to loan UHC certain sums of money for use in development
of these properties, and properties in Texas (the “Xxxxxxx
Properties”).
UHC
entered into an agreement with Xxxx
Petroleum, Inc.
(“Xxxx”)
to assign its interest in the Cato Properties to Xxxx in exchange for cash
and
restricted common stock in Xxxx Petroleum, Inc. For the consideration agreed
on,
UHC assigned its interest in the Cato Properties to Xxxx, and Lothian released
its Deed of Trust and secured liens on the interest in the Cato Properties
assigned to Xxxx.
Following
the transaction, UHC continued to owe Lothian a sum of approximately Three
Million, Three Hundred Thousand Dollars ($3,300,000.00) (being principal
indebtedness plus accrued interest) which indebtedness was secured by a Pledge
Agreement in which UHC pledged the stock of Xxxx to Lothian to secure the
balance on the indebtedness provided for in the original Credit Agreement,
as
amended, and a lien on the Xxxxxxx Properties.
The
stock
of Xxxx Petroleum, Inc. issued to UHC New Mexico Corporation is represented
by
Certificate No. 2456 for Four Hundred Four Thousand Two Hundred Four (404,204)
shares. This stock is restricted stock and has not been registered under the
Securities Act of 1933, and bears a restrictive legend calling for the
registration of the stock in the event of any transfer, or the issuer to receive
an opinion of counsel to evidence that any transfer of the stock is exempt
from
registration.
UHC
desires to transfer the stock of Xxxx to Lothian in exchange for a full and
complete release of all obligations under the Credit Agreement previously
entered into applicable to the Cato Properties, the Pledge Agreement in which
UHC pledged the Xxxx Petroleum, Inc. stock to Lothian relating to the Cato
Properties transaction, and a reduction of the indebtedness of UHC to Lothian
relating to the Xxxxxxx Properties.
AGREEMENTS
For
valuable consideration, the receipt and sufficiency of which are acknowledged,
UHC and Lothian agree as follows:
1. UHC
New
Mexico Corporation ASSIGNS, SELLS, CONVEYS, TRANSFERS, and turns over to Lothian
Oil, Inc., all its interest in the 404,204 shares of Xxxx Petroleum, Inc.
represented by Stock Certificate No. 2456. This transfer will be evidenced
by
this Agreement and UHC New Mexico Corporation endorsing and delivering to
Lothian Oil, Inc. the certificate of shares issued by Xxxx Petroleum,
Inc.
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2. Lothian
Oil, Inc. acknowledges receipt of the certificate of shares in full and final
satisfaction of the indebtedness of UHC to Lothian under the terms of Credit
Agreements previously entered into, and all amendments, extensions, and renewals
of those Agreements pertaining to the Cato Properties.
3. Lothian
is presently negotiating with a third party to sell to it all Common Stock
and
Warrants owned by Lothian in United Heritage Corporation. The contemplated
transaction provides for a cash purchase price of no less than Four Million,
Seven Hundred Sixty-Seven Thousand Dollars ($4,767,000.00) (the “Purchase
Price”).
| (a) |
Lothian
agrees it will not sell the Stock and Warrants of United Heritage
Corporation for less than the Purchase
Price.
|
|
(b)
|
On
the close of this contemplated transaction, Lothian agrees to reduce
the
total amount of the UHC remaining indebtedness to Lothian (debt
attributable to the Xxxxxxx Properties of approximately $800,000.00)
to an
amount such that UHC’s total indebtedness to unsecured and secured
creditors does not exceed $500,000.00; such that the debt UHC continues
to
owe Lothian will be an amount equal to $500,000.00 less all other
indebtedness (which includes accounts payable) of
UHC.
|
4. This
Agreement and the transfer of the stock of Xxxx Petroleum, Inc. by UHC New
Mexico Corporation to Lothian, has been approved by the Board of Directors
of
both UHC New Mexico Corporation and United Heritage Corporation.
5. This
Agreement and the receipt of the certificate of shares of Xxxx Petroleum, Inc.
by Lothian Oil, Inc., and the complete, full, and final release of all
indebtedness of UHC to Lothian attributable to the Cato Properties has been
authorized and approved by its Board of Directors.
6. Both
UHC
and Lothian agree to execute such further and additional documents and
instruments as may be required, advisable, or requested to give full effect
to
the transfer of the shares of stock of Xxxx Petroleum, Inc. to Lothian,
Lothian’s full and complete release of all indebtedness of UHC to Lothian
relating to and attributable to the Cato Properties, and a reduction of the
indebtedness of UHC to Lothian attributable to the Xxxxxxx
Properties.
7. Lothian
acknowledges that the shares transferred to it pursuant to the terms of this
Agreement are restricted and are not registered under the Securities Act of
1933, and agrees to notify Xxxx Petroleum, Inc. of the transfer of the shares
and the ownership of the shares by Lothian Oil, Inc., and comply with all
requirements of Xxxx Petroleum, Inc. for the purposes of effecting a transfer
of
the shares.
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This
Agreement is executed on behalf of both Lothian and UHC as of the dates opposite
the signatures below, but is effective for all purposes as of the Effective
Date
stated above.
| LOTHIAN OIL, INC. | ||
| |
|
|
| Date: | By: | /s/ M. P. Raleigh |
|
Xxxxxxx Xxxxxxx |
||
| Chairman of the Board | ||
| UHC NEW MEXICO CORPORATION, | ||
| |
|
|
| Date: 6/11/2007 | By: | /s/ C. Xxxxx Xxxxxx |
|
C. Xxxxx Xxxxxx |
||
| President and Chief Executive Officer | ||
| UNITED HERITAGE CORPORATION | ||
| |
|
|
| Date: 6/11/2007 | By: | /s/ C. Xxxxx Xxxxxx |
|
C. Xxxxx Xxxxxx |
||
| President and Chief Executive Officer | ||
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