REPUBLIC RESOURCES INC /CO/
EXHIBIT 10.1--PURCHASE AND SALE AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>repex101288k.htm
<DESCRIPTION>EXHIBIT 10.1--PURCHASE AND SALE AGREEMENT
<TEXT>
<HTML>
<HEAD>
     <TITLE>Republic Resources, Inc. Exhibit 10.1 Form 8-K</TITLE>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Exhibit 10.1</FONT></H1>

<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PURCHASE
AND SALE AGREEMENT</FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>dated</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 31, 2002</FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>between</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REPUBLIC
RESOURCES, INC.</FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>as</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Seller</FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>HARKEN
ENERGY CORPORATION</FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>as</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Buyer</FONT></H1>



<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TABLE OF
CONTENTS</FONT></H1>

<PRE>
1.  PURCHASE AND SALE........................................................ 1
         1.1.  PURCHASE AND SALE............................................. 1
         1.2.  INTERESTS..................................................... 1
         1.3.  RESERVED INTERESTS............................................ 2
         1.4.  EFFECTIVE TIME................................................ 2

2.  PURCHASE PRICE........................................................... 3
         2.1.  PURCHASE PRICE................................................ 3
         2.2.  ADJUSTMENTS TO PURCHASE PRICE................................. 3

3.   REPRESENTATIONS AND WARRANTIES.......................................... 4
         3.1.  REPRESENTATIONS AND WARRANTIES OF SELLER...................... 4
         3.2.  REPRESENTATIONS AND WARRANTIES OF BUYER....................... 5

4.  COVENANTS AND AGREEMENTS................................................. 6
         4.1.  COVENANTS AND AGREEMENTS OF SELLER............................ 6
         4.2.  COVENANTS AND AGREEMENTS OF BUYER............................. 7

5.  TITLE MATTERS............................................................ 8
         5.1.  DEFENSIBLE TITLE.............................................. 8
         5.2.  TITLE DEFECT ADJUSTMENTS...................................... 9
         5.3.  CASUALTY LOSS................................................. 9
         5.4.  CONSENTS..................................................... 10

6.  ENVIRONMENTAL MATTERS................................................... 10

7.  TAX MATTERS............................................................. 11

8.   CONDITIONS TO CLOSING.................................................. 11
         8.1.  SELLER'S CONDITIONS.......................................... 11
         8.2.  BUYER'S CONDITIONS........................................... 11

9.  CLOSING................................................................. 12
         9.1.  DATE OF CLOSING.............................................. 12
         9.2.  PLACE OF CLOSING............................................. 12
         9.3.  CLOSING OBLIGATIONS.......................................... 12

10.  OBLIGATIONS AFTER CLOSING.............................................. 13
         10.1. POST-CLOSING ADJUSTMENT PROCEDURE............................ 13
         10.2. FILES AND RECORDS............................................ 14
         10.3. FURTHER ASSURANCES........................................... 14
         10.4. ASSUMPTION OF OBLIGATIONS.................................... 14
         10.5. INDEMNIFICATION.............................................. 15

</PRE>
<BR>
<BR>
<CENTER>(ii)</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<PRE>
11.  TERMINATION OF AGREEMENT............................................... 15
         11.1.  TERMINATION................................................. 15
         11.2.  LIABILITIES UPON TERMINATION OR BREACH...................... 15

12.  MISCELLANEOUS.......................................................... 16
         12.1.  EXHIBITS.................................................... 16
         12.2.  EXPENSES.................................................... 16
         12.3.  NOTICES..................................................... 16
         12.4.  WIRE TRANSFER INSTRUCTIONS.................................. 17
         12.5.  AMENDMENTS.................................................. 17
         12.6.  ASSIGNMENT.................................................. 17
         12.7.  CONDITIONS.................................................. 17
         12.8.  COUNTERPARTS................................................ 17
         12.9.  GOVERNING LAW............................................... 17
         12.10. ENTIRE AGREEMENT............................................ 18
         12.11. PARTIES IN INTEREST......................................... 18
         12.12. SURVIVAL.................................................... 18
         12.13. ARBITRATION................................................. 18

</PRE>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>EXHIBIT
NO</U>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>DESCRIPTION</U></FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBIT A&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;Description of Seller&#146;s oil and gas wells<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBIT B&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;Seller&#146;s oil and gas leases<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBIT C&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;Contracts and agreements<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBIT D&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;Contingent Payment Agreement<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBIT E&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;Form of assignment, conveyance and bill of sale<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBIT F&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;Debenture Exchange Subscription Agreement<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBIT G&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;Registration Rights Agreement</FONT></P>


<BR>
<BR>
<CENTER>(iii)</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PURCHASE AND
SALE AGREEMENT</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>This
Purchase and Sale Agreement</B> (the &#147;Agreement&#148;), dated January 31,
2002, is between <B>Republic Resources, Inc</B>. (&#147;Seller&#148;), a Nevada
corporation and <B>Harken Energy Corporation </B>(&#147;Buyer&#148;), a Delaware
corporation, and is made with reference to the following agreed facts: </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;
Seller holds an undivided interest in various oil and natural gas properties in
the states of Texas and Louisiana in which there were, as of January 1, 2002,
estimated proved reserves of oil and natural gas totaling approximately 3.1
Bcfe. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;
As of the date of this Agreement, there are outstanding $2,645,500 of
Seller&#146;s 11% Convertible Debentures (&#147;Debentures&#148;) and
approximately $5.1 million in Seller&#146;s Series C Redeemable Preferred Stock,
including accrued but unpaid dividends (&#147;Series C Preferred&#148;). </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;
Seller intends to sell and transfer to Buyer or Buyer&#146;s Subsidiary all of
Seller&#146;s interests in certain oil and natural gas reserves in accordance
with the terms and conditions set forth below and to have the purchase price
paid to the holders of its outstanding Debentures and Series C Preferred. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN
CONSIDERATION OF</B> the mutual promises contained herein, the benefits to be
derived by each party hereunder and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree
as follows: </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.&nbsp;&nbsp;&nbsp;
PURCHASE AND SALE.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.1.&nbsp;&nbsp;&nbsp;PURCHASE AND SALE.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller
agrees to sell and convey and Buyer agrees to purchase and pay for the all of
Seller&#146;s right, title and interest in and to those certain oil and natural
gas properties (the &#147;Interests&#148; as defined in Section 1.2), subject to
the terms and conditions of this Agreement. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.2.&nbsp;&nbsp;&nbsp;INTERESTS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the reservations set forth in Section 1.3, all of Seller&#146;s, right, title
and interest in and to the following shall herein be called the Interests: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;The oil and gas wells described in <B><U>EXHIBIT
A</U></B><U></U> hereto (the &#147;Wells&#148;), together with all oil, gas and
mineral production from the Wells; </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;The leasehold estates created by the leases, licenses, permits
and other agreements described in <B><U>EXHIBIT B</U></B><U></U>, (the
&#147;Leases&#148;); together with all overriding royalty interests, production
payments and other payments out of or measured by the value of oil and gas
production; </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;All oil, gas, casinghead gas, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons and all products refined therefrom, together
with all minerals produced in association with these substances (collectively
called the &#147;Hydrocarbons&#148;) in and under and which may be produced and
saved from or attributable to the Leases or Wells, and all rents, issues,
profits, proceeds, products, revenues and other income from or attributable
thereto; </FONT>
</TD>
</TR>
</TABLE>
<BR>


<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
&nbsp;&nbsp;&nbsp;All of the personal property, fixtures and improvements
appurtenant to the Wells, or the Leases or used or obtained in connection with
the operation of the Wells, or the Leases or with the production, treatment,
sale or disposal of hydrocarbons or water produced therefrom or attributable
thereto, including without limitation, pipelines, disposal systems, gathering
systems and compression facilities (the &#147;Equipment&#148;) appurtenant to or
located upon the Leases; and </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
&nbsp;&nbsp;&nbsp;All the property, rights, privileges, benefits and
appurtenances in any way belonging, incidental to, or pertaining to the
property, interests and rights described in Sections 1.2(a) through 1.2(d)
including the Wells, the Leases and reserves of unproduced oil and natural gas
in place, including, to the extent transferable, all exploration agreements,
letter agreements, product purchase and sale contracts, surface leases, gas
gathering contracts, processing agreements, compression agreements, equipment
leases, permits, gathering lines, rights-of-way, easements, licenses, farmouts
and farmins, options, orders, pooling, spacing or consolidation agreements and
operating agreements and all other agreements relating thereto, including those
listed on <B><U>EXHIBIT</U></B><U> <B>C</B></U> (the &#147;Contracts&#148;); and </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
&nbsp;&nbsp;&nbsp;All of the files, records, data (including seismic data and
related information) and other documentary information maintained in the normal
course of business by Seller pertaining to the Wells, Leases, Equipment,
Hydrocarbons and the Contracts (collectively, the &#147;Data&#148;) in the
format maintained by Seller. The Data shall not, however, include any
information, which, if disclosed, would cause Seller to breach any contract or
agreement. Seller will use reasonable efforts to obtain any required consent to
disclose such information. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.3.&nbsp;&nbsp;&nbsp;RESERVED INTERESTS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller
shall reserve and except from the sale and conveyance of the Interests in favor
of itself, its successors and assigns the following:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;All accounts receivable attributable to the Interests that
are, in accordance with generally accepted accounting principles, attributable
to the period prior to the Effective Time; </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;All claims and rights relating to overpayments of costs and
expenses attributable to periods prior to the Effective Time, including, without
limitation, the right to initiate, prosecute or participate, at Seller&#146;s
sole cost and expense, in all audits, audit claims and tax claims or proceedings
relating to or including periods prior to the Effective Time, regardless of when
commenced, arising under applicable law, operating or product sale agreements or
otherwise, and to recover all costs and expenses claimed or shown by such audits
or proceedings as owing to the owner of the Interests for periods prior to the
Effective Time; and </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;All rights, if any, to recover additional production or
proceeds or requirements to refund monies attributable to such production or
proceeds therefrom attributable to the Interests for any production month prior
to the Effective Time, resulting from any adjustment to the net revenue interest
attributable to the Interests in the applicable division orders. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.4.&nbsp;&nbsp;&nbsp;EFFECTIVE TIME.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purchase and sale of the Interests shall be deemed to be effective as of January
1, 2002 at 12:01 a.m. at the location of the Interests (the Effective Time). </FONT></P>

<BR>
<BR>
<CENTER>2</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.&nbsp;&nbsp;&nbsp;
PURCHASE PRICE.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.1.&nbsp;&nbsp;&nbsp;PURCHASE PRICE.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purchase price (&#147;Purchase Price&#148;) for the Interests shall consist of
the following: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;A number of shares of Buyer&#146;s $0.01 par value common
stock (the &#147;Common Stock&#148;) determined by dividing $2,645,500 by the
average reported closing price for Buyer&#146;s common stock for the 20 trading
days ending on the day before the Closing Date of this Agreement (the
&#147;Common Stock Value Per Share&#148;), provided that under no circumstances
shall the Common Stock Value Per Share be less than $1.00, such that no more
than a maximum of 2,645,500 shares of Buyer&#146;s common stock shall be issued;
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;The cash adjustment required for any adjustments described in
Section 2.2(c) below (the &#147;Cash Adjustment&#148;); and</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;A &#147;Contingent Payment&#148; payable within 45 days of
December 31, 2003 which shall be made to holders of Seller&#146;s outstanding
Series C Preferred . A description of the factors to be used to determine the
amount of the Contingent Payment, the payees and other details concerning
Buyer&#146;s obligation to pay the Contingent Payment are described in
<B><U>EXHIBIT D</U></B><U></U> attached hereto and incorporated herein by
reference (the &#147;Contingent Payment Agreement&#148;). </FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.2.&nbsp;&nbsp;&nbsp;ADJUSTMENTS TO PURCHASE PRICE.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Cash Adjustment portion of the Purchase Price shall be adjusted at Closing as
follows: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;The Purchase Price shall be adjusted upward by the following:</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
&nbsp;&nbsp;&nbsp;the value of any oil in storage above the pipeline connection
as of the Effective Time and not previously sold by Seller that is attributable
to the Interests, such value to be the actual amount received by Seller.</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
&nbsp;&nbsp;&nbsp;the amount of all expenditures; rentals and other charges; ad
valorem, property, production, excise, severance and similar taxes based upon or
measured by the ownership of property or the production of hydrocarbons or the
receipt of proceeds therefrom; expenses billed under applicable operating
agreements and, in the absence of an operating agreement, expenses of the sort
customarily billed under such agreements paid by the Seller in connection with
the operation of the Interests, attributable to the period after the Effective
Time and paid before Closing, which shall be evidenced by billings, statements
or other like written evidence;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
&nbsp;&nbsp;&nbsp;an amount equal to all prepaid expenses attributable to the
Interests that are paid by or on behalf of Seller that are attributable to the
period after the Effective Time and paid before Closing, including without
limitation cash calls for wells to be drilled in accordance with the
Contracts;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)
&nbsp;&nbsp;&nbsp;any other amount agreed upon by Seller and Buyer; and</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;The Purchase Price shall be adjusted downward by the following:</FONT>
</TD>
</TR>
</TABLE>
<BR>


<BR>
<BR>
<CENTER>3</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
&nbsp;&nbsp;&nbsp;proceeds received by Seller before Closing attributable to the
Interests that are attributable to production sold from and after the Effective
Time and received by Seller before Closing;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
&nbsp;&nbsp;&nbsp;an amount equal to the sum of all Title Defect adjustments;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
&nbsp;&nbsp;&nbsp;any other amount agreed upon by Seller and Buyer.</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;In the event of Cash Adjustment of the purchase price required
by Sections 2.2(a) or (b), the net amount of any such adjustments shall be
determined and Buyer shall pay to Seller, or Seller shall pay to Buyer, as
appropriate, the net amount of any Cash Adjustment, to be paid at the Closing
or, as described in Sections 8.3(b) and 9.1 not later than 90 days from the
Closing Date of this Agreement. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.&nbsp;&nbsp;&nbsp;
REPRESENTATIONS AND WARRANTIES.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.1.&nbsp;&nbsp;&nbsp;REPRESENTATIONS AND WARRANTIES OF SELLER.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller
represents and warrants as of the date hereof and as of the Closing Date to
Buyer as follows: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;The consummation of the transactions contemplated by this
Agreement will not violate, or be in conflict with any provision of any
agreement or instrument to which Seller is a party or by which it is bound.
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada, and is duly qualified to
carry on its business in each state where the Interests are located, or where
the ownership of the Interests located in such state require Seller to be so
qualified. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;Seller has all requisite corporate power and authority to
carry on its business as presently conducted, and to perform its obligations
under this Agreement. The consummation of the transactions contemplated by this
Agreement will not violate, or be in conflict with, (i) any provision of its
articles of incorporation or bylaws; (ii) any provision of any agreement or
instrument to which it is a party or by which it is bound, noncompliance with
which would have a material adverse effect upon Buyer&#146;s ownership or
operation of the Interests, or upon any of the transactions contemplated by this
Agreement, and (iii) to its knowledge, any judgment, decree, order, statute,
rule or regulation applicable to Seller. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
&nbsp;&nbsp;&nbsp;This Agreement has been, subject to the receipt of approval of
Seller&#146;s stockholders which will be received before Closing, duly
authorized, executed and delivered on behalf of Seller and constitutes the
legal, valid and binding obligation of Seller, enforceable in accordance with
its terms, subject, however, to the effects of bankruptcy, insolvency,
reorganization and other laws for the protection of creditors. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
&nbsp;&nbsp;&nbsp;Seller has incurred no liability, contingent or otherwise, for
brokers or finders fees relating to the transactions contemplated by this
Agreement for which Buyer shall have any responsibility whatsoever. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
&nbsp;&nbsp;&nbsp;There are no bankruptcy, reorganization or arrangement
proceedings pending, being contemplated by or, to the knowledge of Seller,
threatened against Seller. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<CENTER>4</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
&nbsp;&nbsp;&nbsp;Seller has, and shall deliver to Buyer at Closing, Defensible
Title to the Interests as defined in Section 5 below.</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
&nbsp;&nbsp;&nbsp;Seller is in compliance in all material respects with all the
Contracts and with all operating agreements, productions sales agreements, and
other material contractual obligations and commitments which relate to the
Interests. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
&nbsp;&nbsp;&nbsp;The Seller has, and to the best of the Seller&#146;s
information and belief each operator of the Interests has, complied with all
rules, regulations, laws, judgments, orders, or other restrictions applicable to
the Interests and in the operations thereon, including any environmental laws,
rules or regulations. The Seller has received no notice or other information
from any operator of any of the Interests or any other person that is contrary
to the preceding sentence. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
&nbsp;&nbsp;&nbsp;To the best of Seller&#146;s information and belief, all
holders of Debentures qualify as Accredited Investors under Rule 501 of
Regulation D adopted under the Securities Act of 1933, as amended
(&#147;Securities Act&#148;). </FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.2.&nbsp;&nbsp;&nbsp;REPRESENTATIONS AND WARRANTIES OF BUYER.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buyer
represents and warrants as of the date hereof and as of the Closing Date to
Seller as follows: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;The consummation of the transactions contemplated by this
Agreement will not violate, or be in conflict with any provision of any
agreement or instrument to which Buyer is a party or by which it is bound.
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and is duly qualified to
the extent legally necessary to carry on its business in each state where the
Interests are located, or where the ownership of the Interests located in such
state require Buyer to be so qualified. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;Buyer has all requisite corporate power and authority to carry
on its business as presently conducted, and to perform its obligations under
this Agreement. The consummation of the transactions contemplated by this
Agreement will not violate, or be in conflict with, (i) any provision of its
articles of incorporation or bylaws; (ii) any provision of any agreement or
instrument to which it is a party or by which it is bound, noncompliance with
which would have a material adverse effect upon its ownership or operation of
the Interests, or upon any of the transactions contemplated by this Agreement,
and (iii) to its knowledge, any judgment, decree, order, statute, rule or
regulation applicable to Buyer. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
&nbsp;&nbsp;&nbsp;This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable in accordance with its terms, subject, however,
to the effects of bankruptcy, insolvency, reorganization and other laws for the
protection of creditors. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
&nbsp;&nbsp;&nbsp;Buyer has incurred no liability, contingent or otherwise, for
brokers or finders fees relating to the transactions contemplated by this
Agreement for which Seller shall have any responsibility whatsoever. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
&nbsp;&nbsp;&nbsp;The Interests to be acquired by Buyer pursuant to this
Agreement are being acquired by it for its own account for investment purposes
and not for distribution within the meaning of any securities law. In acquiring
the Interests, it is acting in the conduct of its own business and not under
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<CENTER>5</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
any
specific contractual commitment to any third party, or any specific nominee
agreement with any third party, to transfer to, or to hold title on behalf of,
such third party, with respect to all or any part of the Interests.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
&nbsp;&nbsp;&nbsp;There are no bankruptcy, reorganization or arrangement
proceedings pending, being contemplated by or, to the knowledge of Buyer,
threatened against Buyer. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
&nbsp;&nbsp;&nbsp;The Common Stock of Buyer to be issued as part of the Purchase
Price, shall, at the time of Closing, be duly authorized by all necessary
corporate action and such securities shall be validly issued such that the
holders to whom the securities shall be issued shall have the rights set forth
on the certificates delivered by Buyer at the Closing. </FONT>
</TD>
</TR>
</TABLE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.&nbsp;&nbsp;&nbsp;
COVENANTS AND AGREEMENTS.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.1.&nbsp;&nbsp;&nbsp;COVENANTS AND AGREEMENTS OF SELLER.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller
covenants and agrees with Buyer as follows:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;Upon execution of this Agreement, Seller will make available
to Buyer for examination at Seller&#146;s Grand Junction, Colorado office during
normal business hours, all of Seller&#146;s title information, production
information and other information relating to the Interests, including without
limitation, accounting files, production files, land files, lease files, well
files, division order files, contract files and marketing files, and, subject to
the consent and cooperation of operators and other third parties, will cooperate
with Buyer in Buyer&#146;s efforts to obtain, at Buyer&#146;s expense, such
additional information relating to the Interests as Buyer may reasonably desire,
to the extent in each case that Seller may do so without violating legal
constraints or any obligation of confidence or other contractual commitment of
Seller to a third party. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;Seller shall use reasonable efforts to cause the operators of
the Interests to permit Buyer&#146;s authorized representative to conduct, at
Buyer&#146;s sole risk and expense, on-site inspections of the Interests. All
such inspections shall be conducted at the sole risk, cost and expense of Buyer,
and Buyer shall indemnify and defend Seller from and against any and all losses
arising from such inspections. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;During the period from the date of this Agreement to the
Closing Date, Seller agrees, unless specifically waived by Buyer in writing, as
follows: </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
&nbsp;&nbsp;&nbsp;Subject to the provisions of applicable operating and other
agreements, Seller shall continue to administer the Interests in a good and
workmanlike manner consistent with its past practices, and shall carry on its
business with respect to the Interests in substantially the same manner as
before execution of this Agreement.</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
&nbsp;&nbsp;&nbsp;Seller shall, except for emergency action taken in the face of
risk to life, property or the environment, submit to Buyer for prior written
approval, all requests for operating or capital expenditures and all proposed
contracts and agreements relating to the Interests that involve individual
commitments of more than $20,000.00 net to Seller&#146;s interest, or a
cumulative total of $75,000 net to Seller&#146;s interest. Seller will timely notify
Buyer of any and all such expenditures and commitments made which relate to the
Interests.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<CENTER>6</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
&nbsp;&nbsp;&nbsp;Buyer acknowledges that Seller owns an undivided interest in
all of the Interests, and Buyer agrees that the acts or omissions of the other
working interest owners who are not affiliated with Seller shall not constitute
a violation of the provisions of this Agreement, nor shall any action required
by a vote of working interest owners constitute such a violation so long as
Seller has voted its interest in a manner that complies with the provisions of
this Section. To the extent that Seller is not the operator of any of the
Interests, the obligations of Seller in this Agreement shall be construed to
require that Seller use reasonable efforts (without being obligated to incur any
expense or institute any cause of action) to cause the operator of such
Interests to take such actions or render such performance within the constraints
of the applicable operating agreements and other applicable agreements.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.2.&nbsp;&nbsp;&nbsp;COVENANTS AND AGREEMENTS OF BUYER.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buyer
covenants and agrees with Seller that:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;Buyer shall use its best efforts to ensure that as of the
Closing Date it will not be under any material legal or contractual restriction
that would prohibit or delay the timely consummation of such transaction.
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;Buyer shall, subject to the applicable terms of existing
operating agreements, become the working or other interest owner of the
Interests as of 12:01 a.m. local time at the wellsites on the Closing Date,
effective as of the Effective Time. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;After this Agreement is signed, Buyer shall provide reasonable
assistance to Seller to solicit from Seller&#146;s Debenture holders Debenture
Exchange Subscription Agreements (in the form approved by both parties and
attached hereto as <B><U>EXHIBIT F</U></B><U></U>, hereafter the &#147;Exchange
Agreements&#148;) pursuant to which the holders shall agree to exchange the
Debentures for Common Stock of Buyer (as described in Section 7.1(a) (2) below),
subject to Closing of the Agreement in a manner which is intended to be exempt
from registration under Rule 506 of Regulation D adopted under the Securities
Act. Buyer shall prepare, with reasonable assistance from Seller, a disclosure
document for delivery to the holders. Buyer and Seller shall take reasonable
steps to comply with Regulation D; however Buyer shall have no obligation to
Seller or to any such holder with respect to the number of holders who enter
into the Exchange Agreements. At the Closing of the transaction, Buyer shall
issue the appropriate number of shares of Buyer&#146;s Common Stock as
determined under Section 2.1(a) above. Such shares shall be issued to Seller and
the holders of Seller&#146;s Debentures, as directed in writing by Seller on or
before the Closing Date. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
&nbsp;&nbsp;&nbsp;Buyer shall cause the Common Stock of Buyer that is issued
pursuant to this Agreement to be registered on Form S-3 (or other appropriate
form) for resale by the holders of such stock within 60 days following the
Closing Date. Buyer shall use reasonable commercial efforts to have the
registration statement covering the Common Stock declared effective by the
United States Securities and Exchange Commission within a reasonable time after
filing such registration statement. The terms and conditions of the Registration
Rights Agreement, attached hereto as <B><U>EXHIBIT G</U></B><U></U>, which shall
run to the benefit of the former holders of the Debentures, shall govern the
obligations of the Buyer and the rights of the holders of the Common Stock.
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
&nbsp;&nbsp;&nbsp;If Buyer issues Common Stock to Seller under Section 11.2 of
this Agreement, or in accordance with its obligations under the Contingent
Payment Agreement, then in either such case, Buyer shall file a registration
statement to register such shares for resale within three (3) months after
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<CENTER>7</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
issuance
and the obligations of Buyer under the Registration Rights Agreement shall be
deemed to be obligations of Buyer to the holders in any such registration.</FONT></TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.&nbsp;&nbsp;&nbsp;
TITLE MATTERS.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.1.&nbsp;&nbsp;&nbsp;DEFENSIBLE TITLE.</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;The term Defensible Title shall mean, as to the Interests,
such title, whether held by Seller or for the benefit of Seller, that, except
for and subject to the Permitted Encumbrances (as defined in Section 5.1(b)):
(i) entitles Seller to receive as to each Well set forth in <B><U>EXHIBIT
A</U></B><U></U> not less than the Net Revenue Interest set forth in
<B><U>EXHIBIT A</U></B><U></U> as to the oil, gas and associated liquid and
gaseous hydrocarbons produced, saved and marketed therefrom as to its presently
producing formations; (ii) obligates Seller to bear costs and expenses relating
to the maintenance, development and operation of each Well or Lease in an amount
not greater than the Working Interest set forth in <B><U>EXHIBIT
A</U></B><U></U> without a proportionate increase in the Net Revenue Interest,
and (iii) is free and clear of liens and material encumbrances and defects.
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;The term Permitted Encumbrances, as used herein, shall mean,
as follows:</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
&nbsp;&nbsp;&nbsp;lessors&#146; royalties, overriding royalties, unitization and
pooling designations and agreements, reversionary interests and similar
burdens;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
&nbsp;&nbsp;&nbsp;required third party consents to assignments, preferential
rights to purchase, and similar agreements with respect to which prior to
Closing (i) waivers or consents have been or will be obtained from the
appropriate parties prior to the closing date, or (ii) the appropriate time
period for asserting such rights has expired without an exercise of such
rights;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
&nbsp;&nbsp;&nbsp;all rights to consent by, required notices to, filings with,
or other actions by governmental entities in connection with the sale or
conveyance of oil and gas leases or interests therein if the same are
customarily obtained subsequent to such sale or conveyance;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)
&nbsp;&nbsp;&nbsp;easements, rights-of-way, servitudes, permits, surface leases
and other rights with respect to surface operations, pipelines, grazing,
logging, canals, ditches, reservoirs or the like; conditions, covenants or other
restrictions; and easements for streets, alleys, highways, pipelines, telephone
lines, power lines, railways and other easements and rights-of-way, on, over or
in respect of any of the Interests;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)
&nbsp;&nbsp;&nbsp;materialmen&#146;s, mechanics&#146;, repairmen&#146;s,
employees&#146;, contractors&#146;, operators&#146;, tax and other similar liens
or charges arising in the ordinary course of business incidental to
construction, maintenance or operation of any of the Interests: (i) if they have
not been filed pursuant to law, (ii) if filed, they have not yet become due and
payable or payment is being withheld as provided by law, or (iii) if their
validity is being contested in good faith in the ordinary course of business by
appropriate action;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)
&nbsp;&nbsp;&nbsp;any other liens, charges, encumbrances, contracts, agreements,
instruments, obligations, defects or irregularities of any kind whatsoever
affecting the Interests that individually or in the aggregate are not such as to
have a materially adverse effect, do not prevent Seller and after Closing will
not prevent Buyer from receiving the proceeds of production and that do not and
after Closing will not operate to (i) reduce the net revenue interest of Seller
below that set forth on <B><U>EXHIBIT A</U>,</B> or (ii) increase the working
interest above that set forth on <B><U>EXHIBIT A</U></B> without a proportionate
increase in the Net Revenue Interest; and</FONT>
</TD>
</TR>
</TABLE>
<BR>



<BR>
<BR>
<CENTER>8</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)
&nbsp;&nbsp;&nbsp;the limitations included in the contracts, agreements and
other matters, if any, described on <B><U>EXHIBIT C</U>.</B></FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;The term Title Defect as used herein shall mean any material
encumbrance or defect in Seller&#146;s title to the Interests (expressly
excluding Permitted Encumbrances), that renders Seller&#146;s title to the
Interests less than Defensible Title. The term Allocated Value as used herein
means the value allocated to the Well as set forth in the Netherland, Sewell
Reserve Report on the Interests as of the Effective Time, to be prepared after
the date of this Agreement. </FONT>
</TD>
</TR>
</TABLE>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.2.&nbsp;&nbsp;&nbsp;TITLE DEFECT ADJUSTMENTS.</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;No adjustment to the Purchase Price for Title Defects shall be
made unless and until, and only to the extent that the individual value of each
Title Defect exceeds $25,000 net to Seller&#146;s Working Interest in the Well
or Lease affected by the Title Defect or exceeds $75,000 in the aggregate for
all such Title Defects in all Wells or Leases. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;Buyer shall give Seller written notice of Title Defects ten
(10) days prior to the Closing Date. Such notice shall be in writing and shall
include (i) a description of the Title Defect, and (ii) the amount by which
Buyer believes the Value of such Well or Lease has been reduced because of such
Title Defect. Buyer shall be deemed to have waived all Title Defects of which
Seller has not been given timely notice by Buyer and all Title Defects that do
not meet the thresholds for an adjustment set forth in Section 5.2(a). </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;Subject to the limitation contained in Section 5.2(a), a Title
Defect of a Well and the Leases comprising the production unit or proration unit
for the Well shall be cured to the reasonable satisfaction of Buyer before the
Closing, provided that Seller may cure the Title Defect to Buyer&#146;s
reasonable satisfaction within 30 days following Closing. If the Title Defect
cannot be cured before the Closing or within the 30 day period following Closing
to the reasonable satisfaction of Buyer, then the parties shall negociate a
reduction of the Purchase Price to reflect the diminution of value due to the
Title Defect in accordance with Section 2.2 unless prior to closing, (i) Buyer
agrees to waive the relevant Title Defect and purchase the affected Interests
notwithstanding the defect, or (ii) Seller agrees to indemnify Buyer against all
losses, costs, expenses and liabilities with respect to such Title Defect.
</FONT>
</TD>
</TR>
</TABLE>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.3.&nbsp;&nbsp;&nbsp;CASUALTY LOSS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
subsequent to the date of this Agreement and, prior to the Closing, all or any
material portion of the Interests to be conveyed to Buyer at the Closing is
destroyed by fire or other casualty, is taken in condemnation or under the right
of eminent domain or proceedings for such purposes are pending or threatened,
subject to the limitations set forth in Section 5.2, Buyer shall purchase such
Interests notwithstanding any such destruction, taking or pending or threatened
taking and the Purchase Price shall be adjusted in accordance with the
diminution in value. Seller shall, at the Closing, pay to Buyer all sums paid to
Seller by third parties by reason of the destruction or taking of such Interests
to be assigned to Buyer, and shall assign, transfer and set over unto Buyer all
of the right, title and interest of Seller in and to any unpaid awards or other
payments from third parties arising out of the destruction, taking or pending or
threatened taking as to such Interests to be conveyed to Buyer. Seller shall not
voluntarily compromise, settle or adjust any material amounts payable by reason
of any material destruction, taking or pending or threatened taking as to the
Interests to be conveyed to Buyer without first obtaining the written consent of
Buyer. </FONT></P>


<BR>
<BR>
<CENTER>9</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.4.&nbsp;&nbsp;&nbsp;CONSENTS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some
of the Leases are subject to consent of assignment by the Lessor. Seller will
use its best efforts to obtain consents prior to Closing and will assist Buyer
in obtaining any required consents after Closing. Any such consent not obtained
prior to Closing will be deemed to be a Title Defect under Section 5.2 above,
without need of further notice from Buyer. Seller shall have the right to cure
Title Defects arising under this Section within the time limits described in
Section 5.2(c) above. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.&nbsp;&nbsp;&nbsp;
ENVIRONMENTAL MATTERS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buyer
acknowledges that Seller is a non-operator of the Interests and has no direct
control over any matter or circumstance relating to environmental laws,
environmental conditions or environmental claims, the release of materials into
the environment or protection of the environment or health. Buyer hereby agrees
to assume the risk that the Interests may contain waste materials, including
naturally occurring radioactive materials, or hazardous substances, that adverse
physical conditions, including the presence of unknown abandoned oil and gas
wells, water wells, sumps and pipelines may not have been revealed by
Buyer&#146;s investigation, and that liabilities under environmental claims or
environmental conditions or environmental laws could in the future be asserted
against persons who hold working interests in any of the Interests. Seller shall
protect, release, defend and indemnify and hold Buyer free and harmless from and
against any and all costs, expenses, claims, demands, litigation costs,
attorneys&#146; fees and causes of action of every kind and character which
result, or may be claimed to result from, environmental claims, or environmental
conditions or claimed breach of environmental laws or regulations which occurred
or existed on or in connection with any of the Interests as of the Closing Date
of this Agreement, provided, however, that this obligation of Seller to
indemnify Buyer shall apply only to claims, demands, expenses or costs which are
asserted by third parties on or before December 31, 2002. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
for Seller&#146;s obligation to indemnify and hold harmless the Buyer for
liabilities associated with claims made on or before December 31, 2002 for
claims which arose or would be deemed to have arisen prior to the Closing Date,
Buyer hereby releases and discharges, and shall be deemed to release Seller at
Closing from and against, any and all other claims at law or in equity,
including but not limited to environmental claims and environmental conditions,
known or unknown, whether now existing or arising in the future, contingent or
otherwise, against Seller with respect to any matter or circumstance relating to
environmental laws, the release of materials into the environment or protection
of the environment or health. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming
the occurrence of Closing, Buyer hereby expressly agrees to protect, release,
defend, indemnify and hold Seller, its officers, directors, representatives,
agents and its employees free and harmless from and against any and all costs,
expenses, claims, demands, litigation costs, attorneys fees, and causes of
action of every kind and character, including but not limited to injuries or
death to persons, damages to or loss of property, environmental claims or
environmental conditions, arising out of or in connection with the use,
operation, occupancy, occupation, resale or abandonment of the Interests to be
assigned to Buyer hereunder regardless of whether the claim is a result of an
act or omission occurring or condition existing prior to or after the Closing
Date, and from any violation of environmental laws, provided that Buyer has no
obligation to Seller with respect to any liabilities for environmental claims,
environmental conditions or alleged violation of environmental laws or
regulations related to any of the Interests which are asserted against Buyer or
Seller by any third party and which may have occurred prior to the Closing Date
and are asserted on or before December 31, 2002. The parties acknowledge and
agree that the indemnity provided for in this section complies with the express
negligence rule. </FONT></P>

<BR>
<BR>
<CENTER>10</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buyer
represents that it has had an adequate opportunity to review the indemnity and
waiver provisions contained in this Section including the opportunity to submit
the same to legal counsel for review and comment, and understands the indemnity
obligations contained herein. Buyer acknowledges that, except for Seller&#146;s
representations and warranties expressly set forth in this Agreement, it accepts
the Interests &#147;AS IS, WHERE IS&#148; with all faults and existing
conditions. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.&nbsp;&nbsp;&nbsp;
TAX MATTERS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
ad valorem, severance, personal property taxes or any other taxes assessed
against the Interests prior to the Effective Time shall be the obligation of
Seller no matter when invoiced by the operator of any of the Interests. All ad
valorem, severance, personal property taxes or any other taxes assessed against
the Interests after the Effective Time shall be the obligation of Buyer. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.&nbsp;&nbsp;&nbsp;
CONDITIONS TO CLOSING.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8.1.&nbsp;&nbsp;&nbsp;SELLER&#146;S CONDITIONS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
obligations of Seller at the Closing are subject to the satisfaction, at or
prior to the Closing, of the following conditions:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;Each of the following shall have occurred:</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
&nbsp;&nbsp;&nbsp;Holders of a majority of the outstanding voting common stock
of the Seller shall have voted, at a special meeting of stockholders called for
that purpose, to approve this Agreement and the transfer of the Interests by the
Buyer to the Seller;</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
&nbsp;&nbsp;&nbsp;Holders of at least 90% of the outstanding principal amount of
Seller&#146;s Debentures shall have conditionally agreed to exchange the
Seller&#146;s Debentures held by them in exchange for the following: for each
$10,000 in principal amount of the Debentures, the holder will receive at
Closing of this Agreement, out of the Purchase Price, a number of shares of
Buyer&#146;s Common Stock determined by dividing $10,000 by the Common Stock
Value Per Share, and rounded to the nearest whole share; and</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
&nbsp;&nbsp;&nbsp;Holders of 100% of the outstanding Series C Preferred shall
have voted or consented in writing to approve this transaction.</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;No order shall have been entered by any court or governmental
agency having jurisdiction over the parties or the subject matter of this
Agreement that restrains or prohibits the purchase and sale contemplated by this
Agreement and which remains in effect at the time of such Closing; and </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;The aggregate sum of Title Defect adjustments, if any, shall
not exceed $100,000.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
8.2.&nbsp;&nbsp;&nbsp;BUYER&#146;S CONDITIONS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
obligations of Buyer at the Closing are subject to the satisfaction at or prior
to the Closing of the following conditions:</FONT></P>



<BR>
<BR>
<CENTER>11</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;All representations of Seller contained in this Agreement
shall be true in all material respects at and as of the Closing as if such
representations were made at and as of the Closing, and Seller shall have
performed and satisfied all material agreements in all material respects
required by this Agreement to be performed and satisfied by Seller at or prior
to the Closing; </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;No order shall have been entered by any court or governmental
agency having jurisdiction over the parties or the subject matter of this
Agreement that restrains or prohibits the purchase and sale contemplated by this
Agreement and which remains in effect at the time of such Closing; and </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;The aggregate sum of Title Defect adjustments, if any, shall
not exceed $100,000; and</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
&nbsp;&nbsp;&nbsp;Each of the following shall have occurred:</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
&nbsp;&nbsp;&nbsp;Holders of at least 90% of the outstanding principal amount of
Seller&#146;s Debentures shall have conditionally agreed to exchange the
Seller&#130;s Debentures held by them in exchange for the following: for each
$10,000 in principal amount of the Debentures, the holder will receive at
Closing of this Agreement, out of the Purchase Price, a number of shares of
Buyer&#146;s Common Stock determined by dividing $10,000 by the Common Stock
Value Per Share, and rounded to the nearest whole share; and</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
&nbsp;&nbsp;&nbsp;Holders of 100% of the outstanding Series C Preferred shall
have voted or consented in writing to approve this transaction.</FONT>
</TD>
</TR>
</TABLE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.&nbsp;&nbsp;&nbsp;
CLOSING.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
9.1.&nbsp;&nbsp;&nbsp;DATE OF CLOSING.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the conditions stated in this Agreement, the consummation of the transactions
described herein (the &#147;Closing&#148;) shall be held on the first business
day following the Seller&#146;s Stockholders meeting at which this agreement is
approved or at such later date as may be agreed upon by the parties. The date
the Closing actually occurs is called the Closing Date. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
9.2.&nbsp;&nbsp;&nbsp;PLACE OF CLOSING.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Closing shall be held at the offices of Buyer in Houston, Texas. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
9.3.&nbsp;&nbsp;&nbsp;CLOSING OBLIGATIONS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Closing the following events shall occur, each being a condition precedent
to the others and each being deemed to have occurred simultaneously with the
others: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;Seller and Buyer shall execute, acknowledge and deliver an
assignment, bill of sale and conveyance (in sufficient counterparts to
facilitate recording) in substantially the form of
<B><U>EXHIBIT&#160;E</U></B><U></U> hereto conveying to Buyer or Buyer&#146;s
Subsidiary the Interests; and </FONT>
</TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<CENTER>12</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;Seller and Buyer shall execute and deliver a settlement
statement, prepared in accordance with this Agreement (the &#147;Settlement
Statement&#148;) prepared by Seller that shall set forth any Cash Adjustments
required under Section 2.2 then known to the parties and the means used to
determine such amount. Seller shall provide Buyer with the preliminary
Settlement Statement three business days prior to Closing for Buyer&#146;s
review and approval, using for such adjustments the best information then
available. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;Buyer shall deliver to Seller, or if appropriate, Seller shall
deliver to Buyer, the Cash Adjustments to Purchase Price, subject to any further
amounts which may be later determined under Section 10.1 below. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
&nbsp;&nbsp;&nbsp;Buyer shall issue the appropriate number of shares of
Buyer&#146;s Common Stock determined in accordance with Section 2.1(a) above.
The Common Stock shall be issued as designated by Seller to Buyer in writing at
or prior to the Closing Date. At the written request of Seller, Buyer shall
transmit certificates for the Common Stock to the appropriate holders of
Seller&#146;s Debentures conditional upon Buyer having received a fully executed
Debenture Exchange Subscription Agreement as set forth in <B><U>EXHIBIT
F</U></B><U></U>. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
&nbsp;&nbsp;&nbsp;Buyer shall enter into the Contingent Payment Agreement
<B><U>EXHIBIT D</U></B><U></U> with each holder of Seller&#146;s Series C
Preferred Stock, pursuant to written instructions from Seller to be delivered at
or before the Closing Date. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
&nbsp;&nbsp;&nbsp;Buyer shall deliver to Seller the balance of the Purchase
Price not paid to holders of Seller&#146;s Debentures. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
&nbsp;&nbsp;&nbsp;Seller and Buyer shall execute, acknowledge and deliver
letters in lieu of transfer orders directing all purchasers of production to
make payment to Buyer of proceeds attributable to production from the Interests
assigned to Buyer after the Effective Time. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
&nbsp;&nbsp;&nbsp;Seller shall prepare such notices to third-party operators of
the change in ownership of the Interests from Seller to Buyer. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.&nbsp;&nbsp;&nbsp;
OBLIGATIONS AFTER CLOSING.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10.1.&nbsp;&nbsp;&nbsp;POST-CLOSING ADJUSTMENT PROCEDURE.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
soon as practicable after the Closing Date, but no later than 90 days after the
Closing Date, Seller shall prepare and deliver to Buyer, in accordance with this
Agreement, a statement (the Final Settlement Statement) setting forth each
adjustment or payment under Section 2.2 that was not finally determined as of
the Closing Date and showing the calculation of such adjustments. Within fifteen
days after receipt of the Final Settlement Statement, or if Seller fails to
deliver a Final Settlement Statement, Buyer shall deliver to Seller a written
report containing any changes that Buyer proposes be made to the Final
Settlement Statement. The parties shall undertake to agree with respect to the
amounts due pursuant to such post-closing adjustment no later than fifteen days
after Seller has received Buyer&#146;s proposed changes. The date upon which
such agreement is reached or upon which the Final Purchase Price is established,
shall be called the Final Settlement Date. In accordance with Section 2.1(d), if
(i)Buyer owes a net amount to Seller, Buyer shall pay in immediately available
federal funds the amount of such difference to Seller or to Seller&#146;s
account (as designated by Seller), or (ii) Seller owes a net amount to Buyer,
Seller shall pay in immediately available federal funds the amount of such
difference to Buyer or to Buyer&#146;s account (as designated by Buyer). Payment
by Buyer or Seller of this portion, if any, of the Cash Adjustment shall be made
within five days after the Final Settlement Date. </FONT></P>

<BR>
<BR>
<CENTER>13</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10.2.&nbsp;&nbsp;&nbsp;FILES AND RECORDS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
thirty days after the Closing Date, Seller shall deliver to Buyer originals of
all of Seller&#146;s files and records relating to the Interests in the format
maintained by Seller, but excluding any records or data that cannot be
transferred because of prior contractual restrictions. Seller shall have the
right to retain copies of any or all files and records delivered to Buyer. Buyer
shall make available to Seller, in Buyer&#146;s office during normal hours,
Buyer&#146;s files and records relating to the Interests so long as Buyer
retains such files and records. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10.3.&nbsp;&nbsp;&nbsp;FURTHER ASSURANCES.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
Closing, Seller and Buyer shall execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered such instruments, and shall take such other
action as may be necessary or advisable to carry out their obligations under
this Agreement and under any document, certificate or other instrument delivered
pursuant hereto. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10.4.&nbsp;&nbsp;&nbsp;ASSUMPTION OF OBLIGATIONS.</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;Transfer and assignment of the Interests to Buyer or
Buyer&#146;s Subsidiary shall constitute an express assumption by Buyer of, and
Buyer expressly agrees to pay, perform, fulfill and discharge all claims, costs,
expenses, liabilities and obligations (including but not limited to
environmental claims and environmental conditions) accruing or relating to the
owning, developing, exploring, operating and maintaining of the Interests
conveyed to Buyer at the Closing, including without limitation, all violations
of environmental law and all obligations arising under operating agreements,
product sales agreements and the other agreements covering or relating to the
Interests, except as specifically stated to the contrary in Section 6 above.
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;Buyer acknowledges that Seller has not made, and Seller hereby
expressly disclaims and negates, any representation or warranty, express or
implied, relating to the condition of any real or immovable property, personal
or movable property, equipment, inventory, machinery and fixtures constituting
part of the interests including, without limitation, (i) any implied or express
warranty of merchantability, (ii) any implied or express warranty of fitness for
a particular purpose, (iii) any implied or express warranty of conformity to
models or samples of materials, (iv) any rights of Buyer under appropriate
statutes to claim diminution of consideration or return of the Purchase Price,
and (v) any implied or express warranty regarding environmental laws, the
release of materials into the environment including naturally occurring
radioactive material, or protection of the environment or health, it being the
express intention of Buyer and Seller that the real or immovable property,
personal or movable property, equipment, inventory, machinery and fixtures shall
be conveyed to Buyer as is and in their present condition and state of repair.
Buyer represents to Seller that Buyer has made or caused to be made such
inspections with respect to the real or immovable property, personal or movable
property, equipment, inventory, machinery and fixtures as Buyer deems
appropriate and Buyer will accept the real or immovable property, personal or
movable property, equipment, inventory, machinery and fixtures as is, in their
present condition and state of repair. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;Seller hereby expressly negates and disclaims, and Buyer
hereby waives and acknowledges that Seller has not made, any representation or
warranty, express or implied, relating to (i) the accuracy, completeness or
materiality of any information, data or other materials (written or oral)
furnished to Buyer by or on behalf of Seller or (ii) production rates,
recompletion opportunities, decline rates, geological or geophysical data or
interpretations, the quality, quantity, cost of recovery of any hydrocarbon
reserves, any product pricing assumptions, or the ability to sell or market any
hydrocarbons after Closing. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<CENTER>14</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
&nbsp;&nbsp;&nbsp;Buyer shall also indemnify Seller for all liabilities which
are assessed against Seller for federal, state, or local taxes, (not including
income taxes) together with penalties or interest thereon (provided the
penalties and interest do not result from the negligence, late filing, fraud or
other acts of malfeasance of Seller), which relate to all operations of the
property transferred hereunder and which arise on or after the Effective Time.
</FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10.5.&nbsp;&nbsp;&nbsp;INDEMNIFICATION.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
and after the Closing date, Buyer and Seller shall indemnify each other as
follows: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;Seller shall defend, indemnify and save and hold harmless
Buyer, its officers, directors, employees and agents, against all losses,
damages, claims, demands, suits, costs, expenses, liabilities and sanctions of
every kind and character, including without limitation reasonable
attorneys&#146; fees, court costs and costs of investigation, which arise from
or in connection with any breach by Seller of this Agreement. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;Buyer shall defend, indemnify and save and hold harmless
Seller, its officers, directors, employees and agents against all losses,
damages, claims, demands, suits, costs, expenses, liabilities and sanctions of
every kind and character, including without limitation reasonable
attorneys&#146; fees, court costs and costs of investigation, which arise from
or in connection with (i) any of the claims, costs, expenses, liabilities and
obligations assumed by Buyer pursuant to Section 6 or (ii) any breach by Buyer
of this Agreement. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.&nbsp;&nbsp;&nbsp;
TERMINATION OF AGREEMENT.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
11.1.&nbsp;&nbsp;&nbsp;TERMINATION.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement and the transactions contemplated hereby may be terminated in the
following instances:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
&nbsp;&nbsp;&nbsp;By Seller if any of the conditions set forth in Section 8.1
are not satisfied in all material respects or waived as of the Closing Date.
</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
&nbsp;&nbsp;&nbsp;By Buyer if any of the conditions set forth in Section 8.2 are
not satisfied in all material respects or waived as of the Closing Date. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
&nbsp;&nbsp;&nbsp;At any time by the mutual written agreement of Buyer and
Seller.</FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
&nbsp;&nbsp;&nbsp;By either party at its written election if the Closing Date
has not occurred by April 15, 2002.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
11.2.&nbsp;&nbsp;&nbsp;LIABILITIES UPON TERMINATION OR BREACH.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event of the termination of this Agreement by Seller in accordance with
Section 11.1(a), Seller shall pay Buyer $25,000 cash as liquidated damages for
termination. If Buyer terminates this Agreement for any reason other than those
described in Section 11.1(b) above, it shall pay Seller $200,000 as liquidated
damages for termination. Any obligation under this Section 11.2 shall be payable
immediately upon termination of this Agreement. In the event Buyer shall owe
Seller liquidated damages under this Section, Buyer may at its sole election pay
up to one-half of such liquidated damages in shares of Buyer&#146;s Common Stock </FONT></P>

<BR>
<BR>
<CENTER>15</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.&nbsp;&nbsp;&nbsp;
MISCELLANEOUS.</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.1.&nbsp;&nbsp;&nbsp;EXHIBITS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Exhibits referred to in this Agreement are hereby incorporated in this Agreement
by reference and constitute a part of this Agreement.</FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.2.&nbsp;&nbsp;&nbsp;EXPENSES.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise specifically provided, all fees, costs and expenses incurred by
Buyer or Seller in negotiating this Agreement or in consummating the
transactions contemplated by this Agreement shall be paid by the party incurring
the same, including, without limitation, legal and accounting fees, costs and
expenses. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.3.&nbsp;&nbsp;&nbsp;NOTICES.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
notices and communications required or permitted under this Agreement shall be
in writing and any communication or delivery hereunder shall be deemed to have
been duly made when personally delivered to the individual indicated below, or
if mailed, when received by the party charged with such notice and addressed as
follows: </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IF TO SELLER:</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>REPUBLIC RESOURCES, INC.</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;743 Horizon Court, Suite 333<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Junction, Colorado  81506<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention:  Patrick J. Duncan, President</FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With a copy to:</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ALAN W. PERYAM, ESQ.</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1120 Lincoln Street, Suite 1000<BR>
Denver, Colorado 80203</FONT></P>

<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IF TO BUYER:</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>HARKEN ENERGY CORPORATION</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;580 WestLake Park Boulevard, Suite 600<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houston, Texas 77079<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention:  Bruce N. Huff, President and Chief Operating Officer</FONT></P>


<BR>
<BR>
<CENTER>16</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With a copy to:</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>HARKEN ENERGY CORPORATION</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;580 WestLake Park Boulevard, Suite 600<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houston, Texas 77079<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention:  Larry E. Cummings, Vice President, General Counsel</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
party may, by written notice so delivered to the other parties, change the
address or individual to which delivery shall thereafter be made. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.4.&nbsp;&nbsp;&nbsp;WIRE TRANSFER INSTRUCTIONS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event a party is required to pay cash to the other party, payments shall be
by wire transfer unless otherwise agreed by the parties at the time. When a wire
transfer payment is required, the party to whom payment is to made shall furnish
written wire transfer instructions to the other party. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.5.&nbsp;&nbsp;&nbsp;AMENDMENTS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement may not be amended nor any rights hereunder waived except by an
instrument in writing signed by the party to be charged with such amendment or
waiver and delivered by such party to the party claiming the benefit of such
amendment or waiver. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.6.&nbsp;&nbsp;&nbsp;ASSIGNMENT.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
party may assign all or any portion of its rights or delegate all or any portion
of its duties hereunder unless it continues to remain liable for the performance
of its obligations hereunder and obtains the prior written consent of the other
party, which consent shall not be unreasonably withheld. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.7.&nbsp;&nbsp;&nbsp;CONDITIONS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
inclusion in this Agreement of conditions to Seller&#146;s and Buyer&#146;s
obligations at the Closing shall not, in and of itself, constitute a covenant of
either Seller or Buyer to satisfy the conditions to the other party&#146;s
obligations at the Closing. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.8.&nbsp;&nbsp;&nbsp;COUNTERPARTS.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement may be executed by Buyer and Seller in any number of counterparts,
each of which shall be deemed an original instrument, but all of which together
shall constitute but one and the same instrument.</FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.9.&nbsp;&nbsp;&nbsp;GOVERNING LAW.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement and the transactions contemplated hereby shall be construed and
enforced in accordance with the laws of the state of Colorado, but without
regard to laws or principles of conflicts of laws that would cause application
of the laws of another jurisdiction. The parties hereby consent to the exclusive
venue of the proper state or federal court located in the Denver, Colorado, and
hereby waive all other venues. </FONT></P>

<BR>
<BR>
<CENTER>17</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.10.&nbsp;&nbsp;&nbsp;ENTIRE AGREEMENT.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement (including the Exhibits hereto) constitutes the entire understanding
among the parties with respect to the subject matter hereof, superseding all
negotiations, prior discussions and prior agreements and understandings relating
to such subject matter. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.11.&nbsp;&nbsp;&nbsp;PARTIES IN INTEREST.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto, and their respective successors and assigns, and nothing contained in
this Agreement, express or implied, is intended to confer upon any other person
or entity any benefits, rights or remedies. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.12.&nbsp;&nbsp;&nbsp;SURVIVAL.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
representations, warranties, covenants, agreements and indemnities provided for
in this Agreement shall survive the Closing and shall not be extinguished by the
doctrine of merger by deed or any similar doctrine and no waiver, release, or
forbearance of the application of the provisions of those paragraphs in any
given circumstance shall operate as a waiver, release, or forbearance of the
provisions of the paragraphs as to any other circumstance. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
12.13.&nbsp;&nbsp;&nbsp;ARBITRATION.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
disputes arising out of or in connection with this agreement, or any
determination required to be made by the parties as to which the parties are
unable to agree (including, without limitation, the determination of Defects),
shall be settled by arbitration in Denver, Colorado. Any matter to be submitted
to arbitration hereunder may be submitted to arbitration by either party. Any
matter submitted to arbitration shall be conducted in accordance with the rules
of the American Arbitration Association. Any award by the arbitrator(s) shall be
final, binding and not appealable, and judgment may be entered thereon in any
court of competent jurisdiction. Notwithstanding the above, neither Seller or
Buyer shall be required to resolve any disputes relating to this Agreement
through arbitration if an unrelated third party files suit against both Buyer
and Seller relating to the interests conveyed pursuant to this Agreement, in
such event, it being understood and agreed that Buyer and Seller may assert any
claims and/or defenses arising out of this Agreement against each other in the
lawsuit. </FONT></P>

<BR>
<BR>
<CENTER>18</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executed
as of the date stated on the first page of this Agreement.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SELLER:</B><BR><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>REPUBLIC RESOURCES, INC.</B></FONT></P>
<BR><BR>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <U>/s/ Patrick J. Duncan&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Patrick
J. Duncan, President</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>BUYER:</B><BR><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>HARKEN ENERGY CORPORATION</B></FONT></P>
<BR><BR>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <U>/s/ Bruce N. Huff&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bruce
N. Huff,  President and<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Chief Operating Officer</FONT></P>


<BR>
<BR>
<CENTER>19</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT A</FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[Ommited]</FONT></P>
<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT B</FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[Ommited]</FONT></P>
<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT C</FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[Ommited]</FONT></P>
<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT D</FONT></H1>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT D<BR>
CONTINGENT PAYMENT AGREEMENT</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Contingent Payment Agreement (this &#147;Agreement&#148;) is made and entered
into as of the ____ day of _____________, 2002, by and between Republic
Resources, Inc. (&#147;Republic&#148;), a Nevada corporation, and Harken Energy
Corporation (&#147;Harken&#148;), a Delaware corporation.</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RECITALS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
Republic and Harken have entered into that certain Purchase and Sale Agreement
(the &#147;Purchase Agreement&#148;) dated January 31, 2002, pursuant to which
Republic is selling to Harken all of Republic&#146;s interest in and to certain
oil and natural gas properties in the states of Texas and Louisiana, as further
described therein;</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
Pursuant to Section 2.1 (c) of such Purchase Agreement, Harken is entering into
this Agreement (which is attached as Exhibit D to the Purchase Agreement) to
pay, subject to the terms and conditions herein, to Republic a &#147;Contingent
Payment&#147; (as defined herein).</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AGREEMENT</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, for and in consideration of the foregoing Recitals and the mutual
agreements contained herein, the sufficiency of which is hereby acknowledged and
confirmed, the parties hereto, intending to be legally bound, hereby agree as
follows:</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 1.
<U>Contingent Payment</U>.</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
Subject to the terms and conditions of this Agreement, Harken hereby covenants
and agrees to pay, within forty five (45) days after December 31, 2003, to
Republic or its permitted assigns (as provided in Section 3 of this Agreement),
the Contingent Payment (as hereinafter defined). The Contingent Payment may be
payable in either cash, shares of Harken Common Stock, $.01 par value (the
valuation of such shares as determined below), or any combination thereof, as
Harken in its sole and absolute discretion determines. In the event some or all
of the Contingent Payment is made in the form of shares of Harken Common Stock,
the value per share of such shares shall be equal to the average reported
closing price for Harken&#146;s Common Stock for the 20 trading days immediately
prior to the Valuation Date.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
The Contingent Payment shall be determined as follows (all the amounts below
will be determined or calculated either: a) as of December 31, 2003; or b)
through December 31, 2003, as appropriate);</FONT></P>
<PRE>
                           Revenues                                              XXX
                           Less Costs                                           (XXX)
                                                                                ----
                           Equals the (Excess Cost)
                                    or the Excess Revenue                       (XXX) or XXX
                           Less 15% of Excess Cost, if any                      (XXX)
                           Plus:    PV15 of the PDP Reserves                     XXX
                                    PV30 of the PDNP Reserves                    XXX
                                    PV50 of the PUD Reserves                     XXX
                                                                                ----
                           Subtotal                                              XXX
                           Times the Contingent Payment %                         50%
                                                                               -----
                                    Equals the Contingent Payment                XXX
                                                                                ====
</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Should
the above calculation result in a negative number for the Contingent Payment,
there will be no liability by either Republic or Harken. In no event shall the
Contingent Payment exceed $3,968,250.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event Harken
elects to make any portion of the payment which may become due hereunder in the
form of its shares of Common Stock, Harken shall execute and deliver to Republic
(or its permitted assigns) a Registration Rights Agreement in a form
substantially similar to the Registration Rights Agreement entered into in
connection with the Purchase Agreement, provided that Harken shall not be
obligated to execute and deliver such Registration Rights Agreement unless and
until the recipient of such Registration Rights Agreement agrees to execute and
be bound by the terms and provisions of such Registration Rights
Agreement.</FONT></P>


<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
Notwithstanding anything in this Agreement, in no event shall Harken have any
duty, commitment or obligation to develop or participate in the Properties, and
Harken may develop or participate in the Properties as it determines in its sole
and absolute discretion (using such reasonable business judgment as Harken uses
in connection with its other properties). In the event Harken determines in its
sole and absolute discretion not to participate in development of the
Properties, then the Proved Reserves Value will be calculated on the
non-consenting, reversionary or other retained interest (if any) held by Harken
in such Properties. If the Proved Reserves Value after application of the
Adjusted Costs is zero, then Harken shall not be obligated to make any
Contingent Payment hereunder.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Section 2.
<U>Definitions and References</U>.</B>When used in this Agreement, the following
terms shall have the respective meanings assigned hereto:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>Lookback Properties</U>&#147; shall mean Harken&#146;s right, title and
interest in and to acquired pursuant to the Purchase Agreement: (i) the Wilcox
Prospects located in Jackson County, Texas, currently known as the Matterhorn
Prospect, the W1 and W2 prospects, the WR (Wilcox River) prospect, the W3
prospect, the W4 prospect, and the W5 prospect, and (ii) the Yegua Prospects
located in Jackson County, Texas, currently known as the Yegua 17-C prospect,
and the River prospect, all of these prospects and corresponding leases being
more particularly described on Exhibit A attached hereto.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>Revenues</U>&#147; shall mean any proceeds received or receivable by
Harken from any production or sale of the Lookback Properties between January 1,
2002 and December 31, 2003.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>Costs</U>&#147; shall mean any and all costs (including without
limitation geophysical, geological and land costs), expenses, obligations,
liabilities, and all other associated costs incurred by Harken relating to or
incurred in connection with the development and production of the Lookback
Properties between January 1, 2002 and December 31, 2003.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>Proved Reserves</U>&#147; shall mean the estimated quantities of oil
and/or natural gas from of any interests held by Harken in the Lookback
Properties that, with reasonable certainty, appear to be recoverable in the
future under the economic and operating conditions as of December 31, 2003. The
Parties agree that this estimate of proved reserves will be determined by either
Netherland, Sewell and Associates or some other mutually agreeable petroleum
engineering firm.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>Proved Reserves Value</U>&#147; shall mean the undiscounted pre-tax
value of any interests held by Harken in the Proved Reserves as of the December
31, 2003. In determining the Proved Reserves Value, the oil and gas shall be
priced by using the average of (x) the average strip price for the 12 months
immediately preceding the Valuation Date (as published in <U>Inside FERC</U> (or
other publications acceptable to Harken and Republic) on the Valuation Date) and
(y) the projected average strip price for the 12 months immediately following
the Valuation Date (as published in <U>The Wall Street Journal</U> (or other
publications acceptable to Harken and Republic) on the December 31, 2003). In
addition, the Proved Reserve Values will be categorized between Proved Developed
Producing (&#147;PDP&#148;), Proved Developed Non-producing (&#147;PDNP&#148;),
and Proved Underdeveloped (&#147;PUD&#148;) in accordance with generally
accepted petroleum-engineering methods. The Parties agree that the estimate of
Proved Reserves Value will be determined by the same petroleum-engineering firm
that determines the Proved Reserves.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>PV15 of the PDP Reserves</U>&#147; shall mean the value of the Proved
Developed Producing Reserve Value discounted on an annual basis at
15%.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>PV30 of the PDNP Reserves</U>&#147; shall mean the value of the Proved
Developed Non-producing Reserve Value discounted on an annual basis at
30%.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>PV50 of the PUD Reserves</U>&#147; shall mean the value of the Proved
Undeveloped Reserve Value discounted on an annual basis at 50%.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>Contingent Payment</U>&#147; shall be the amount payable by Harken, as
computed and described in Section 1 of this Agreement. In no event shall the
Contingent Payment exceed $3,968,250.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;<U>Valuation Date</U>&#147; shall mean December 31, 2003.</FONT></TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<CENTER>2</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 3. Miscellaneous.</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
Except as otherwise specifically provided, all fees, costs and expenses incurred
by Republic or Harken in negotiating this Agreement or in consummating the
transactions contemplated by this Agreement shall be paid by the party incurring
the same, including, without limitation, legal and accounting fees, costs and
expenses.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
All notices and communications required or permitted under this Agreement shall
be in writing and any communication or delivery hereunder shall be deemed to
have been duly made when personally delivered to the individual indicated below,
or if mailed, when received by the party charged with such notice and addressed
as follows:</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IF TO REPUBLIC:<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REPUBLIC RESOUCES, INC.</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;743 Horizon Court, Suite 333<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Junction, Colorado 81506<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention:  Patrick J. Duncan, President<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>With a copy to:<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ALAN W. PERYAM, ESQ.</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1120 Lincoln Street, Suite 1000<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Denver, Colorado  80203<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IF TO HARKEN:<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HARKEN ENERGY CORPORATION</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;580 WestLake Park Boulevard, Suite 600<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houston, Texas  77079<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention:  Bruce N. Huff, President and Chief Operating Officer<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>With a copy to:<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HARKEN ENERGY CORPORATION</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;580 WestLake Park Boulevard, Suite 600<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houston, Texas  77079<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention:  Larry E. Cummings, Vice President, General Counsel</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
party may, by written notice so delivered to the other parties, change the
address or individual to which delivery shall thereafter be made.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
This Agreement may not be amended nor any rights hereunder waived except by an
instrument in writing signed by the party to be charged with such amendment or
waiver and delivered by such party to the party claiming the benefit of such
amendment or waiver.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
Neither party may assign all or any portion of its rights or delegate all or any
portion of its duties hereunder unless it continues to remain liable for the
performance of its obligations hereunder and obtains the prior written consent
of the other party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Republic may assign this Agreement to the holders
of its Series C Redeemable Preferred Stock (the &#147;Series C Preferred&#148;),
provided that Republic provides prior notice of such assignment and provided
further that Harken receives prior to such assignment evidence to Harken&#146;s
reasonable satisfaction that the holders of such Series C Preferred are
"accredited investors&#147; as that term is defined in Regulation D promulgated
under the Securities Act of 1933 and such other evidence as Harken may
reasonably require that such assignment does not violate federal and state
securities laws. Further, notwithstanding the foregoing, Harken may assign this
Agreement to any of its subsidiaries if Harken shall also assign the Properties
under this Agreement to such subsidiairy. Harken shall provide notice of such
assignment to Republic following making of the same.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
This Agreement may be executed by Republic and Harken in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same instrument.</FONT></P>

<BR>
<BR>
<CENTER>3</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
This Agreement and the transactions contemplated hereby shall be construed and
enforced in accordance with the laws of the state of Colorado, but without
regard to laws or principles of conflicts of laws that would cause application
of the laws of another jurisdiction. The parties hereby consent to the exclusive
venue of the proper state or federal court located in Denver, Colorado, and
hereby waive all other venues.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
All disputes arising out of or in connection with this Agreement, or any
determination required to be made by the parties as to which the parties are
unable to agree, shall be settled by arbitration in Denver, Colorado. Any matter
to be submitted to arbitration hereunder may be submitted to arbitration by
either party. Any matter submitted to arbitration shall be conducted in
accordance with the rules of the American Arbitration Association. Any award by
the arbitrator(s) shall be final, binding and not appealable, and judgment may
be entered thereon in any court of competent jurisdiction. In the event Republic
initiates such arbitration and it is determined in such arbitration that Harken
has failed to pay any amounts required to be paid under this Agreement to
Republic by an amount of 5% or more, then Harken shall be required to pay the
costs of the arbitrators.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
Notwithstanding anything in this Agreement to the contrary, in no event shall
Harken have any duty, commitment or obligation to develop or participate in the
Properties, and Harken may develop or participate in the Properties as it
determines in its sole and absolute discretion (using such reasonable business
judgment as Harken uses in connection with its other properties).</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
All references in this Agreement to sections, subsections and other subdivisions
refer to corresponding sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the beginning
of any such subdivisions are for convenience only and shall not constitute part
of such subdivisions and shall be disregarded in construing the language
contained herein. Words in the singular form shall be construed to include the
plural and <U>vice versa</U>, unless the context otherwise requires.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
Harken shall provide to Republic (or its permitted assigns) semi-annually, on a
calendar year basis, a status report on the current value of the proved oil and
natural gas reserves in the Properties (as of the date of such report), using
the calculations as described herein to determine the Proved Reserves Value and
determining the value of such proved reserves as of the date of the report
instead of the Valuation Date. Harken shall also include with such report the
assumptions used in calculating the Proved Reserves Value. Harken may base such
report upon its own internal reserve valuations if such report is provided for
any time other than as of a calendar year end. Any such report provided as of a
calendar year end will be based upon a third party outside engineering
report.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executed
as of the date stated on the first page of this Agreement.</FONT></P>
<PRE>
                                                     REPUBLIC:

                                                     REPUBLIC RESOURCES, INC.


                                                     By:  ______________________________
                                                          Patrick J. Duncan, President


                                                     HARKEN:

                                                     HARKEN ENERGY CORPORATION



                                                     By:  ______________________________
                                                          Bruce N. Huff, President and
                                                          Chief Operating Officer
</PRE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>END OF
EXHIBIT D</FONT></H1>

<BR>
<BR>
<CENTER>4</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>EXHIBIT E</U></FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Form of
Assignment, Conveyance and Bill of Sale</U></FONT></H1>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>KNOW ALL MEN BY THESE PRESENTS:</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Republic Resources, Inc.,</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;743 Horizon Court, Suite 333<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grand Junction, CO 81506-8715</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(hereinafter referred
to as &#147;Assignor&#148;) for and in consideration of the sum of Ten Dollars
($10.00) and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, does hereby sell, assign, convey, transfer, and set
over, subject to the reservations herein set forth, unto</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Xplor Energy SPV-I, Inc.</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an Oklahoma corporation,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;580 WestLake Park Boulevard, Suite 600<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Houston, TX 77079</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(hereinafter referred
to as &#147;Assignee&#148;) and subject to the following terms and provisions,
all of its right, title and interest in and to the &#147;Subject Property&#147;
described as follows:</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
The oil and gas wells described in <U>EXHIBIT A</U> hereto (the
&#147;Wells&#148;), together with all oil, gas and mineral production from the
Wells;</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
The leasehold estates created by the leases, licenses, permits and other
agreements described in
<U>EXHIBIT B</U>, (the &#147;Leases&#148;); together with all overriding royalty interests, production payments and other payments
out of or measured by the value of oil and gas production;</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
All oil, gas, casinghead gas, condensate, distillate, liquid hydrocarbons,
gaseous hydrocarbons and all products refined therefrom, together with all
minerals produced in association with these substances (collectively called the
&#147;Hydrocarbons&#148;) in and under and which may be produced and saved from
or attributable to the Leases or Wells, and all rents, issues, profits,
proceeds, products, revenues and other income from or attributable
thereto;</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
All of the personal property, fixtures and improvements appurtenant to the
Wells, or the Leases or used or obtained in connection with the operation of the
Wells, or the Leases or with the production, treatment, sale or disposal of
hydrocarbons or water produced therefrom or attributable thereto, including
without limitation, pipelines, disposal systems, gathering systems and
compression facilities (the &#147;Equipment&#148;) appurtenant to or located
upon the Leases; and</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
All the property, rights, privileges, benefits and appurtenances in any way
belonging, incidental to, or pertaining to the property, interests and rights
described in(a) through (d) including the Wells, the Leases and reserves of
unproduced oil and natural gas in place, including, to the extent transferable,
all exploration agreements, letter agreements, product purchase and sale
contracts, surface leases, gas gathering contracts, processing agreements,
compression agreements, equipment leases, permits, gathering lines,
rights-of-way, easements, licenses, farmouts and farmins, options, orders,
pooling, spacing or consolidation agreements and operating agreements and all
other agreements relating thereto, including those listed on <U>EXHIBIT C</U>
(the &#147;Contracts&#148;);</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
All of the files, records, data (including seismic data and related information)
and other documentary information maintained in the normal course of business by
Seller pertaining to the Wells, Leases, Equipment, Hydrocarbons and the
Contracts (collectively, the &#147;Data&#148;) in the format maintained by
Assignor. The Data shall not, however, include any information, which, if
disclosed, would cause Seller to breach any contract or agreement. Assignor will
use reasonable efforts to obtain any required consent to disclose such
information; and</FONT></P>

<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
All other rights and interests in, to or under or derived from the Subject
Property, even though improperly described in the Exhibits. It is the expressed
intent of the parties that all of Assignor&#146;s right, title and interest in
any and all of the Subject Property, whether or not the same may be correctly
described on the Exhibits hereto be assigned to Assignee hereunder.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Assignment, Conveyance and Bill of Sale is made subject to the following terms
and provisions:</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
NOTWITHSTANDING ANY PROVISION IN THIS ASSIGNMENT, CONVEYANCE AND BILL OF SALE OR
ANY DOCUMENT DELIVERED IN CONNECTION HEREWITH TO THE CONTRARY, THE SUBJECT
PROPERTY AND ANY OTHER PROPERTY OR RIGHTS CONVEYED HEREUNDER ARE CONVEYED
<B>&#147;AS IS, WHERE IS,&#148; &#147;WITH ALL FAULTS,&#148;</B> AND IN THEIR
PRESENT CONDITION AND STATE OF REPAIR, AND WITHOUT WARRANTY, EITHER EXPRESS OR
IMPLIED (EXCEPT WARRANTY OF TITLE BY, THROUGH OR UNDER ASSIGNOR, BUT NOT
OTHERWISE) INCLUDING WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE OR ANY OTHER SORT OF WARRANTY. ASSIGNEE HAS INSPECTED, OR HAS HAD THE
OPPORTUNITY TO INSPECT, THE ASSIGNED PREMISES FOR ALL PURPOSES.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Assignor reserves from this Assignment, Conveyance and Bill of Sale in favor of
itself the following:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All accounts receivable attributable to the Subject Property that are
attributable to the period prior the Effective Time;</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All claims and rights relating to overpayments of costs and expenses
attributable to period prior to the Effective Time, including, without
limitation, the right to initiate, prosecute or participate, at Assignor&#146;s
sole cost and expense, in all audits, audit claims and tax claims or proceedings
relating to or including periods prior to the Effective Time, regardless of when
commenced, arising under applicable law, operating or product sale agreements or
otherwise, and to recover all costs and expenses claimed or shown by such audits
or proceedings as owing to the owner of the Subject Property for periods prior
to the Effective Time; and</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iii)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All rights, if any, to recover additional production or proceeds or requirements
to refund monies attributable to such production or proceeds therefrom
attributable to the Subject Property for any production month prior to the
Effective Time, resulting from any adjustment to the net revenue interest
attributable to the Subject Property in the applicable division
orders.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assignee,
its successors and assignees, shall observe, perform and comply with the terms,
provisions, covenants and conditions, express or implied, of the oil and gas
leases described on <U>EXHIBIT B</U>, together with any related contracts, and
all laws, rules, regulations and orders, both state and federal, applicable to
the ownership and enjoyment of the rights herein assigned.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
from and after the Effective Time of this instrument, Assignee hereby agrees to
assume and shall assume, pay and perform all liabilities and obligations arising
in connection with the ownership or operations of the Subject Property.
Commencing from and after the Effective Time of this instrument, Assignee shall
indemnify and hold harmless Assignor against and from any and all loss, cost,
expense, liability or damage (including fees and expenses of attorneys,
technical experts and expert witnesses) incurred or suffered by Assignor arising
out of or relating to Assignee&#146;s failure to discharge any such liabilities
and obligations.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
saleable gas, oil and/or condensate at the Effective Time of this instrument is
owned by the Assignor and is not to be considered a part of this
sale.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Assignment, Conveyance and Bill of Sale is to be treated as an occasional sale,
and no sales tax is being collected from Assignee. If however, this transaction
is later deemed to be subject to sales or use tax, Assignee agrees to be solely
responsible for any and all sales or use taxes due on equipment, material and
property hereby assigned and sold, and Assignee shall remit such taxes to the
proper taxing authority.</FONT></P>

<BR>
<BR>
<CENTER>2</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Assignment, Conveyance and Bill of Sale is subject to the terms and provisions
of that certain Purchase and Sale Agreement dated January 31, 2002 by and
between Assignor and Assignee.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
instrument shall be binding upon and inure to the benefit of Assignor and
Assignee, their personal representatives, executors, successors and assigns. The
provisions hereof shall be covenants running with the lands and leases
assigned.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXECUTED
 this ________ day of ____________________, 2002, but effective for all purposes as of January
1, 2002, at 12:01 A.M. at the location of the Subject Property (&#147;Effective Time&#148;).</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ASSIGNOR:</FONT></H2>
<PRE>
Attest:                                              REPUBLIC RESOURCES, INC.

By:_____________________________                     By:__________________________________
   Marilyn L. Adams, Secretary                          Patrick J. Duncan, President
</PRE>
<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ASSIGNEE:</FONT></H2>
<PRE>
Attest:                                              Xplor Energy SPV-I, Inc.
                                                     an Oklahoma corporation,


By:_____________________________                     By:___________________________________

</PRE>
<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ACKNOWLEDGMENTS</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>STATE OF COLORADO)<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)ss<BR>
COUNTY OF MESA)</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
instrument was acknowledged before me, a Notary Public, by Patrick J. Duncan,
President of Republic Resources, Inc., a Nevada corporation, on behalf of said
corporation.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Witness
my hand and official seal this ________day of _______, 2002.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>My Commission Expires:</FONT></P>

<P>__________________________________

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
__________________________________________________<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notary
Public in and for the State of ______________</FONT></P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>STATE OF TEXAS)<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)ss<BR>
COUNTY OF)</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
instrument was acknowledged before me, a Notary Public, by _______________,
President of Xplor Energy SPV-I, Inc., an Oklahoma corporation, on behalf of
said corporation.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Witness
my hand and official seal this ________day of _______, 2002.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>My Commission Expires:</FONT></P>

<P>__________________________________

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
__________________________________________________<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notary
Public in and for the State of ______________</FONT></P>




<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>END OF EXHIBIT E</FONT></P>

<BR>
<BR>
<CENTER>3</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>EXHIBIT F</U><BR>
<BR>
Debenture Exchange Subscription Agreement</FONT></H1>

<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>______________________________<BR>
Name of Debenture Holder<BR>
<BR>
______________________________<BR>
Principal Amount</FONT></H1>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DEBENTURE
EXCHANGE SUBSCRIPTION AGREEMENT</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Debenture Exchange Subscription Agreement (the &#147;Agreement&#148;) is between
the debenture holder identified on the signature page of this Agreement
(&#147;Subscriber&#148;), Republic Resources, Inc. (&#147;Republic&#148;) and
Harken Energy Corporation (&#147;Harken&#148;) and is made with reference to the
following agreed facts:</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
The undersigned Subscriber is the holder of a 11% Convertible Debenture, due
April 15, 2003 (the "Debenture&#148;) of Republic (formerly Pease Oil and Gas
Company) in the principal amount set forth on the signature page of this
Agreement.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
There are outstanding $2,645,500 of the Debentures held by Subscriber and other
holders of the Debentures.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
Republic has agreed to sell to Harken, pursuant to a Purchase and Sale Agreement
dated January 31, 2002 (the &#147;Asset Sale Agreement&#148;), all of
Republic&#146;s interests in its oil and natural gas properties located in the
states of Louisiana and Texas that have &#147;proved reserves&#147; as of
January 1, 2002. The properties to be sold include all of Republic&#146;s
income-producing assets as of January 1, 2002. In exchange for these assets,
Harken will deliver at closing up to 2,645,500 shares of Harken common stock
that will be distributed to the Subscriber and other holders of the Debentures
on a pro-rata basis in full satisfaction of Republic&#146;s principal obligation
under the outstanding Debentures.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.
The number of shares of Harken Common Stock to be issued at the closing of the
Asset Sale Agreement will be determined by dividing the total principal amount
of Republic&#146;s outstanding Debentures by the average reported closing price
for Harken&#146;s Common Stock for the 20 trading days ending on the day before
the Closing of the Asset Sale Agreement (hereafter the &#147;Common Stock Value
Per Share&#148;). However, under no circumstances shall the Common Stock Value
Per Share be less than $1.00.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.
The completion of the sale of the Republic assets to Harken is contingent upon:
(i) the approval of the Asset Sale Agreement by stockholders of Republic at a
special meeting of stockholders to be called for that purpose, and (ii)
acceptance of the exchange offer described in this Agreement by the holders of
substantially all of the outstanding Debentures.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.
The parties intend that this Agreement shall be irrevocable by Subscriber unless
the Asset Sale Agreement is not closed by at least June 1, 2002.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.
In addition to the proved oil and gas properties, Republic will also convey to
Harken the Company&#146;s interest in certain exploratory prospects in Jackson
County, Texas that have not been given any initial value in the contemplated
transaction. These exploratory prospects will be evaluated for additional value
at the end of 2003 using a "Lookback&#147; formula as defined in the P&amp;S
Agreement, and a future &#147;Lookback Payment&#147; may be made in early 2004.
The amount of any &#147;Lookback Payment&#147; will be contingent on, among
other things, future exploratory successes in the Jackson County prospects, of
which there can be no assurance. In addition, there can be no assurance that the
operators of those prospects will actually drill any wells on the prospects by
the end of the Lookback period (which is at the end of 2003) and if so whether
Harken will agree to participate in exploration of the prospects since it will
be under no obligation to do so. Accordingly, the amount of any &#147;Lookback
Payment", if any, cannot be reasonablely determined at this time. In any case,
Republic anticipates that the contingent Lookback Payment ultimately will be
assigned to the holders of its Series C Redeemable Preferred Stock in connection
with a restructuring of that security. It is expressly understood that neither
the Subscriber nor any other holder of the Debentures will haveany right, title
or interest in the contingent Lookback Payment regardless of its ultimate value,
if any, and regardless of whether it is ultimately assigned to the Series C
Preferred stockholders or retained by Republic.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
CONSIDERATION, of the covenants and agreements of the parties and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:</FONT></P>

<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.
Agreement to Exchange.</b> Subscriber hereby agrees to exchange and surrender the
Debenture held by Subscriber effective on the day of Closing of the Asset Sale
Agreement. In exchange for surrender and cancellation of Subscriber&#146;s
Debenture, Subscriber shall receive the following:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a)</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Payment of all unpaid interest on Subscriber&#146;s Debenture through the date
of the Closing, to be paid by Republic at such time as Subscriber&#146;s
Debenture certificate is delivered to Republic for cancellation; and</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b)</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
An amount of common stock of Harken determined by dividing the principal amount
of Subscriber&#146;s Debenture by the &#147;Common Stock Value Per Share&#147;
determined as described above. The shares of Harken Common Stock shall be issued
effective as of the closing of the Asset Sale Agreement and shall be delivered
to Subscriber at such time as Subscriber&#146;s Debenture certificate is
delivered to Republic for cancellation.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Republic shall pay the
interest to Subscriber through the date of the Closing of the Asset Sale
Agreement and Subscriber&#146;s Debenture shall be deemed surrendered and
canceled as of such date, subject only to delivery to Subscriber of the Harken
Common Stock in exchange for surrender of Subscriber&#146;s Debenture
certificate.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.
Irrevocable Subscription; Acceptance.</B> Subscriber understands and
acknowledges that this subscription to exchange Subscriber&#146;s Debenture in
the manner described in this Agreement is irrevocable by Subscriber unless
Republic and Harken have not closed the Asset Sale Agreement by June 1, 2002.
Acceptance of this subscription by Republic and Harken is subject to: (i)
approval of the Asset Sale Agreement by Republic stockholders, (ii) receipt of
Debenture Exchange Subscriptions from holders of at least 90% of the outstanding
principal amount of Republic&#146;s Debentures (provided that Harken and
Republic may, in their discretion, waive this condition), and (iii) Closing of
the Asset Sale Agreement. Until and unless the foregoing conditions are
satisfied, Subscriber&#146;s Debenture shall continue to earn interest and to
represent an obligation of Republic to Subscriber as described in the
Debenture.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.
Acknowledgment of Disclosure.</B> Subscriber acknowledges the receipt of
Harken&#146;s Disclosure Memorandum, dated January 31, 2002, including
Harken&#146;s Annual Report on Form 10-KSB for the fiscal year ended December
31, 2001, and Quarterly Report on Form 10-QSB for the quarter ended September
30, 2001, which are the last publicly-filed reports of Harken. Subscriber
acknowledges receipt from Republic of Republic&#146;s letter dated January 11,
2002, together with copies of Republic&#146;s Quarterly Report on Form 10-QSB
for the quarter ended September 30, 2001 and Form 8-K dated February__, 2002,
the most recent public reports filed by Republic. Subscriber has also been given
access to full and complete information regarding Republic and Harken and has
utilized such access to the Subscriber&#146;s satisfaction for the purpose of
obtaining such information regarding Republic and Harken as the Subscriber has
reasonably requested; and, particularly, Subscriber has been given reasonable
opportunity to ask questions of, and receive answers from, representatives of
Republic and Harken concerning the terms and conditions of the exchange offer
described in this Agreement, the business and affairs of Republic and of Harken
and all additional information requested by Subscriber to the extent it would be
reasonably available.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.
Investment Intent.</B> Subscriber represents and warrants that the common stock
of Harken which will be issued upon completion fo the exchange described in this
Agreement will be held for the Subscriber&#146;s own account and for investment
purposes only, and without the intention of reselling or redistributing the same
except as may be effected in compliance with the registration requirements of
the Securities Act of 1933, as amended (&#147;Securities Act&#148;); Subscriber
has made no agreement with others regarding any of the securities to be obtained
in the exchange and Subscriber&#146;s financial condition is such that it is not
likely that it will be necessary for Subscriber to dispose of any of such
securities in the foreseeable future. Subscriber further represents and agrees
that if, contrary to the foregoing intentions, Subscriber should later desire to
dispose of or transfer any of the Harken Common Stock received by Subscriber in
the exchange in any manner, Subscriber shall not do so unless and until (i) such
securities have been registered under the Securities Act and all applicable
securities laws; or (ii) Subscriber shall first deliver to Harken a written
notice declaring such holders&#146;s intention to effect such transfer and
describe in sufficient detail the manner and circumstances of the proposed
transfer, which notice shall be accompanied either by: (A) written opinion of
legal counsel who shall be reasonably satisfactory to Harken, which opinion
shall be addressed to Harken and reasonably satisfactory in form and substance
to Harken&#146;s counsel, to the effect that the proposed sale or transfer is
exempt from the registration provisions of the Securities Act and all applicable
state securities laws, or (B) a &#147;no-action letter&#147; from the Securities
and Exchange Commission to the effect that the transfer of the Harken Common
Stock without registration would not result in a recommendation by the staff of
the Commission that action be taken with respect thereto.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.
Residence of Subscriber.</B> Subscriber represents and warrants that Subscriber
is a bona fide resident of, is domiciled in, and received the exchange offer and
made the decision to exchange securities in the state of residence set out on
the signature page of this Agreement.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.
Subscriber is Accredited Investor.</B> Subscriber acknowledges that at the time
the Debenture was initially acquired, and at the time that Republic and
Subscriber agreed to extend the maturity and otherwise modify the terms of the
Debentures in March 2001, Subscriber qualified as a Accredited Investor as
described in Rule 501 of Regulation D adopted by the United States Securities
and Exchange Commission under the Securities Act. Subscriber represents to
Republic and Harken that as of the date of this Agreement set forth on the
signature page below, Subscriber continues to qualify as an Accredited
Investor.</FONT></P>

<BR>
<BR>
<CENTER>2</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.
Acknowledgment of Certain Risks.</B> Subscriber acknowledges that upon Closing
of the Asset Sale Agreement, Subscriber shall have exchanged the Republic
Debenture now held, a debt security of Republic, for Harken Common Stock, an
equity security in a different entity. Following the exchange Republic shall
have no obligation to Subscriber and Subscriber will, instead, hold an equity
investment in Harken with no assurance that he will be able to liquidate the
investment and no right to receive the existing principal amount of the
Debenture. Subscriber acknowledges that holding the Harken Common Stock involves
certain risks, some of which are summarized or referred to in the Harken
Disclosure Memorandum. Likewise, Subscriber acknowledges that continuing to hold
the Republic Debenture would involve risk to Subscriber and other holders of the
Debentures, some of which are summarized in the information furnished to
Subscriber as summarized or described above. Subscriber is accepting the
exchange offer described in this Agreement notwithstanding such
risks.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.
No Tax Advice.</B> Subscriber acknowledges that an exchange of Subscriber&#146;s
Debenture for Harken Common Stock as described in this Agreement is likely to be
deemed to be a taxable transaction to Subscriber. Subscriber is likely to have
taxable gain or loss equal to the difference between Subscriber&#146;s tax basis
in the Debenture and the fair market value of the Harken Common Stock to be
received in the exchange. While it is expected that the fair market value of the
Harken Common Stock is likely to be approximately equal to the principal balance
of the Debenture, Republic and Harken have made no representations to Subscriber
as to the tax implications to Subscriber from the exchange described in this
Agreement and Subscriber has been advised to seek his own tax counsel regarding
the exchange. Subscriber has received, from Subscriber&#146;s own tax or other
advisors, all information Subscriber requires concerning the tax consequences of
the exchange described in this Agreement and has not, and does not, rely upon
Republic or Harken with respect to tax implications of the exchange.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.
No Transfer or Assignment.</B> Neither this Agreement nor any of the rights of
Subscriber, Republic or Harken may be transferred or assigned by any party. This
Agreement shall survive the death or disability of Subscriber and shall be
binding upon Subscriber&#146;s heirs, executors, administrators, successors and
attempted assigns.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.
Arbitration of Disputes.</B> In the event that a dispute arises between
Subscriber and Republic or Harken arising out of or in connection with exchange
by Subscriber of the Debenture for Harken Common Stock, Subscriber, Republic and
Harken hereby expressly agree that such dispute shall be resolved through
arbitration rather than litigation. The undersigned hereby agrees to submit the
dispute to binding arbitration through the American Arbitration Association
(&#147;AAA&#148;) in Denver, Colorado, to be conducted in accordance with the
rules of commercial arbitration adopted by AAA. Such a dispute shall be
submitted to arbitration by any party by filing a written request for
arbitration with AAA. Subscriber, Republic and Harken agree that the Federal
Arbitration Act shall govern the disposition of all issues raised in the
arbitration proceeding. A decision in the arbitration proceeding shall be final
and binding on the parties.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.
Notices.</B> All notices or other communications required under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered
personally or mailed by certified or registered mail, return receipt requested,
postage prepaid as follows: if to Subscriber, to the address set forth on the
signature page to this Agreement; and if to Republic or Harken to their address
as set forth in the Harken Disclosure Memorandum.</FONT></P>




<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[The balance
of this page is blank]</FONT></P>


<BR>
<BR>
<CENTER>3</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURE PAGE TO<BR>
<U>DEBENTURE EXCHANGE SUBSCRIPTION AGREEMENT</U></FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
signing this Agreement in the place indicated below, Subscriber represents to
Republic and Harken that Subscriber has read this entire Agreement, that the
information set forth below is accurate, and that Subscriber agrees to exchange
his or her Debenture for Harken Common Stock as described in this
Agreement.</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>INDIVIDUAL</U></FONT></H1>
<PRE>

________________________________________                      Address to Which Correspondence
Name of Registered Owner of                                   Should be Directed
Debenture (&#147;Subscriber&#148;)                                      ___________________________________________

                                                              ___________________________________________

_________________________________________                     ___________________________________________
Signature (Individual)                                        City, State, and Zip Code


_________________________________________                     ____________________________________________
Signature (Second Signature if Joint Owner)                   Tax Identification or Social Security Number
_________________________________________                     ____________________________________________
Name Typed or Printed                                         Second Name Type or Printed

(      )                                                      (         )
_________________________________________                     ____________________________________________
Fax Number                                                    Telephone Number

_________________________________________                     $___________________________________________
Date                                                            Principal Amount of Debenture
</PRE>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>ACCEPTANCE</U></FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Debenture Exchange Subscription Agreement is accepted as of ___________, 2002
(the date of Closing of the Purchase and Sale Agreement dated January 31,
2002).</FONT></P>
<PRE>
REPUBLIC RESOURCES, INC.                                      HARKEN ENERGY CORPORATION

By ____________________________________                       By ___________________________________
   Patrick J. Duncan, President                                  Bruce N. Huff, President
</PRE>

<BR>
<BR>
<CENTER>4</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>SIGNATURES</U></FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
signing this Agreement in the place indicated below, Subscriber represents to
Republic and Harken that Subscriber has read this entire Agreement, that the
information set forth below is accurate, and that Subscriber agrees to exchange
his or her Debenture for Harken Common Stock as described in this
Agreement.</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>CORPORATION,
PARTNERSHIP, TRUST OR OTHER ENTITY</U></FONT></H1>
<PRE>

________________________________________                      Address to Which Correspondence
Name of Registered Owner of                                   Should be Directed
Debenture (&#147;Subscriber&#148;)                                      ___________________________________________

                                                              ___________________________________________

_________________________________________                     ___________________________________________
Signature (Individual)                                        City, State, and Zip Code


_________________________________________                     ____________________________________________
Signature (Second Signature if Joint Owner)                   Tax Identification or Social Security Number
_________________________________________                     ____________________________________________
Name Typed or Printed                                         Second Name Type or Printed

(      )                                                      (         )
_________________________________________                     ____________________________________________
Fax Number                                                    Telephone Number

_________________________________________                     $___________________________________________
Date                                                            Principal Amount of Debenture
</PRE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*The
 Certificate of Signatory must also be completed.</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>CERTIFICATE OF SIGNATORY</U><BR>
<U>To be completed if the Debentures are owned by an entity</U></FONT></H1>
<PRE>
         I, ______________________________________, am the ______________________ of
            [Name printed]
__________________________________________________________________ (the &#147;Entity&#148;)
</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
certify that I am empowered and duly authorized by the Entity to execute anc
carry out the terms of this Agreement and to exchange the Debentures as
described in this Agreement, and certify that this Agreement has been duly and
validly executed on behalf of the Entity and constitutes a legal and binding
obligation of the Entity.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, I have hereto set my hand this _____ day of ________,
200__.</FONT></P>
<PRE>
                                                     ____________________________________________
                                                     Signature
</PRE>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>ACCEPTANCE</U></FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Debenture Exchange Subscription Agreement is accepted as of ___________, 2002
(the date of Closing of the Purchase and Sale Agreement dated January 31,
2002).</FONT></P>
<PRE>
REPUBLIC RESOURCES, INC.                             HARKEN ENERGY CORPORATION

By ____________________________________              By ___________________________________
   Patrick J. Duncan, President                         Bruce N. Huff, President
</PRE>

<BR>
<BR>
<CENTER>5</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>EXHIBIT G</U></FONT></H1>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REGISTRATION RIGHTS AGREEMENT</FONT></H1>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS REGISTRATION RIGHTS
AGREEMENT (&#147;Agreement&#148;) is made and entered into as of the ____ day of
_____________, 2002, by and among Harken Energy Corporation, a Delaware
corporation (&#147;Harken&#148;), and Republic Resources, Inc., a Nevada
corporation (&#147;Republic&#148;).</FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>RECITALS:</U></FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A.</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Reference is hereby made to that certain Purchase and Sale Agreement dated as of
the date hereof (the &#147;Purchase Agreement&#148;) by and among Harken and
Republic pursuant to which Republic will upon Closing, receive a certain number
of Shares of Harken Common Stock, which Shares are the subject of this
Agreement. </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>B.</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Pursuant to the terms of the Agreement, Harken has agree to provide Republic and
the holders of the Registrable Securities (as defined herein) with the
registration rights set forth herein.</FONT></TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>AGREEMENT</U>:</B></FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOW, THEREFORE, for and
in consideration of the foregoing Recitals and the mutual agreements contained
herein, the sufficiency of which is hereby acknowledged and confirmed, the
parties hereto, intending to be legally bound, agree as follows:</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 1.
<U>Definitions and References</U>.</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
When used in this Agreement, the following terms shall have the respective
meanings assigned to them in this Section 1 or in the Sections referred to
below:</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Agreement&#147; shall mean this Registration Rights Agreement, as
hereafter amended or modified in accordance with the terms hereof.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Commission&#147; shall mean the Securities and Exchange Commission (or any
successor body thereto).</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Common Stock&#147; shall mean the common stock, par value $0.01 per share,
of Harken.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Purchase Agreement&#147; shall mean the Purchase and Sale Agreement dated
as of the date hereof between Harken and Republic.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Exchange Act&#147; shall mean the Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated under such Act.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Harken&#147; shall have the meaning assigned to it in the preamble to this
Agreement.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Harken Indemnified Parties&#147; shall have the meaning assigned to it in Section 5(b).</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Holder&#147; shall mean any Person that holds Registrable
Securities.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Holder Indemnified Parties&#147; shall have the meaning assigned to it in
Section 5(a).</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Republic&#147; shall have the meaning assigned to it in the preamble to this Agreement.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Person&#147; shall mean any individual, corporation, partnership, joint
venture, limited partnership, limited liability company, trust, unincorporated
organization, government or any agency or political subdivision thereof or other
entity.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Prospectus&#147; shall mean the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated pursuant to the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to any such prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference, if
any, in such prospectus.</FONT></TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<BR>
<HR SIZE=5>

<PAGE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Registrable Securities&#147; shall mean the Shares issued to Republic
under the Purchase Agreement or pursuant to that certain Contingent Payment
Agreement attached as <U>EXHIBIT D</U> to the Purchase Agreement.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Registration Expenses&#147; shall mean all fees and expenses incident to
Harken&#146;s performance of or compliance with the registration rights granted
hereunder, including (without limitation) all registration and filing fees, fees
and expenses of compliance with securities and blue sky laws, printing and
engraving expenses, messenger, telephone and delivery expenses, fees and
disbursements of counsel for Harken, and fees and disbursements of all
independent certified public accountants and underwriters (excluding discounts
and commissions); provided, however, that Registration Expenses shall not
include any Selling Expenses.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Registration Statement&#147; shall mean any registration statement of
Harken that covers any of the Registrable Securities pursuant to this Agreement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Securities Act&#147; shall mean the Securities Act of 1933, as amended,
and all rules and regulations promulgated under such Act.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Selling Expenses&#147; shall mean underwriting discounts or commissions,
any selling commissions and stock transfer taxes attributable to sales of
Registrable Securities and the fees and expenses of counsel for any
Holder.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All references in this Agreement to sections, subsection and other subdivisions
refer to corresponding sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the beginning
of any such subdivisions are for convenience only and shall not constitute part
of such subdivisions and shall be disregarded in construing the language
contained herein. The words &#147;this Agreement", &#147;this instrument",
&#147;herein", &#147;hereof", &#147;hereby", &#147;hereunder&#147; and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Words in the singular form shall be
construed to include the plural and <U>vice versa</U>, unless the context
otherwise requires.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 2.
<U>Registration Shares</U>.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Harken shall prepare and
file with the Commission as soon as reasonably practicable and in any event no
later than sixty (60) days after Closing the Purchase Agreement and the issuance
contemplated thereunder to Republic of the Shares, a registration statement on
Form S-3 or other appropriate form pursuant to Rule 415 under the Securities Act
covering the sale by Republic of such Registrable Securities. Harken shall use
its reasonable best efforts to cause each such Registration Statement to be
declared effective as soon as reasonably practicable after the filing thereof
and to keep each such Registration Statement effective for no less than the
later of 365 days or the expiration of the Selling Period (as defined in the
Exchange Agreement) applicable to the Registrable Securities covered
thereby.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 3.
<U>Registration Procedures</U>.</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In connection with Harken&#146;s registration obligations hereunder, Harken will
use its reasonable best efforts to effect the registration of the Registrable
Securities in accordance with the intended methods of disposition thereof as
quickly as practicable, and pursuant thereto Harken will a expeditiously as
possible:</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
prepare and file with the Commission not later than the time specified in this
Agreement, a Registration Statement on the appropriate form with respect to the
Registrable Securities and use its reasonable best efforts to cause such
Registration Statement to become effective as soon as reasonably practicabl
after the filing thereof (provided, that before filing a Registration Statement
or Prospectus or any amendments or supplements thereto, Harke will furnish
copies of all such documents proposed to be file to all Holders of Registrable
Securities covered by such Registration Statement);</FONT></TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<CENTER>2</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
prepare and file with the Commission such amendments an supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for a period of not less
than the period set fort in this Agreement or such shorter period which will
terminate when all Registrable Securities covered by such Registration Statement
have been sold (but not before the expiration of the applicable Prospectus
deliver period) and comply with the provisions of the Securities Act with
respect to the disposition of all Registrabl Securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by the Holders thereof set forth in such Registration
Statement:</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
furnish to each Holder of Registrable Securities such number of copies of such
Registration Statement, each amendment and supplement thereto, the Prospectus
included in such Registration Statement (including, without limitation, each
preliminary prospectus) and such other documents as such Holde may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Holder.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
use its reasonable best efforts to register or qualif such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
within the United States as any Holder reasonably requests and do an and all
other acts and things which may be reasonably necessary or advisable to enable
such Holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Holder (provided that Harken will not be
required to qualify generally to do business or subject itself to any general
service of process in any jurisdiction where it is otherwise not the so
subject);</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
notify each Holder of such Registrable Securities, at an time when a Prospectus
relating thereto is required to be delivered under the Securitie Act, of the
happening of any event which requires the making of any change in the Prospectus
included in such Registration Statement so that such document will not contain
an untrue statement of a materia fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and, at the request of any such Holder, Harken will prepare a
supplement or amendment to such Prospectus so that such Prospectus will not
contain a untrue statement of a materia fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading;</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
use its reasonable best efforts to cause all such Registrable Securities to be
listed on each securities exchange or exchanges, automated quotatio system or
over-the-counter market upon which securities of Harken of the same class are
then listed;</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
enter into such customary agreements (including, withou limitation, underwriting
agreements in customary form, substance and scope) and take all such other
actions as the Holders of a majority of the Registrable Securities being sold or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities;</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(8)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
otherwise use its reasonable best efforts to comply with all applicable rules
and regulations of the Commission, and make generally available to its security
holders an earnings statement no later than ninety (90) day after the end of the
12-month period beginning with the first day of Harken&#146;s first full
calendar quarter after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) o the
Securities Act and Rule 158 thereunder;</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
in the event of the issuance or threatened issuance of any stop order suspending
the effectiveness of a Registration Statement, or an order suspending or
preventin the use of any related Prospectus or suspending the qualification of
any Registrable Securities included in such Registration Statemen for sale in
any jurisdiction, promptly notify each Holder o Registrable Securities of the
issuance or threatened issuance of such order and us its reasonable best efforts
promptly to prevent the entry of such order or obtain the withdrawal of such
order if issued;</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(10)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
use its reasonable best efforts to cause such Registrable Securities covere
by such Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the Holders
thereof to consummate the disposition of such Registrable
Securities;</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<CENTER>3</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(11)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
make available at all reasonable times and in a reasonable manner for inspection
by any Holder of Registrable Securities, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by an such Holder or underwriter
(collectively, the &#147;Inspecto&#148;, all fi records,
corporate documents and properties of Harken (collectively, the &#147;Records&#148;) and
cause the officers, directors and employees of Harken to supply all information
reasonably requested by any such Inspector in connection with such Registration
Statement prior to its effectiveness, in each case to the extent that such
Records and information are pertinent to the information disclosed in the
Registration Statement; provided, that eac such Inspector shall execute and
deliver to Harken a Confidentiality Agreement in the form attached hereto as
<U>EXHIBIT A</U>. Records which Harken determines, in good faith, to be confidential
and which Harken notifies the Inspectors are confidential shall not be disclosed
by the Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in the Registration Statement or (ii
the release of such Records i ordered pursuant to a subpoen or other order from
a court of competent jurisdiction; each Holder of Registrable Securities agrees
that it will, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, give notice to Harken and allow Harken, at
Harken&#146;s expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential; and</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(12)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
use its reasonable best efforts to obtain, if require by said underwriters in
connection with an underwritten offering, a comfort letter from Harken&#146;s
independent public accountant in customary form and covering such matters of the
type customarily covered by comfor letters with respect to offerings of the type
being made pursuant to the Registration Statement as the Holders of the
Registrable Securities reasonably request</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b)</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In connection with each Registration Statement, Republic agrees and each Holder
of Registrable Securities (including Registrable Securities in any Registration
Statement filed pursuant to this Agreement) will be deemed to have agreed, as
follows:</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
upon receipt of any notice from Harken of the happening of any event of the kind
described in Section 3(a)(5) or the issuance of any order of the kind described
in Section 3(a 9), the Holders of Registrable Securities covered by such
Registration Statement will forthwith discontinue disposition of such
Registrable Securities until the Holders of Registrable Securities receive
copies of the supplemented or amended Prospectus contemplated by Section
3(a)(5), or until the are advised in writing by Harken that the use of the
applicable Prospectus may be resumed, an they have received copies of any
additional or supplementa filings that are incorporated or deemed to be
incorporated by reference in such Prospectus (it being the agreement of the
parties hereto, however, that the obligation of Harken with respect to
maintaining the subject Registration Statement curren and effective, and the
Sellin Period (as defined in the Exchange Agreement) with respect to such
Registrable Securities, shall be extended by a number of trading days equal to
the period the Holders of Registrable Securities are required by this Section
3(b)(1) to discontinue disposition of such Registrable Securities; and</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
furnish to Harken such information regarding each Holder, the Registrable
Securities held by such Holder and the intended method of disposition thereof as
Harken shall reasonably request and as shall be reasonably required in
connection with the preparation of the applicable Registration Statement and
other actions taken by Harken under this Agreement, and it shall be a condition
precedent to the obligation of Harken to take any action pursuant to this
Agreement in respect of the Registrable Securities that such information has
been furnished to Harken by the Holders of Registrable Securities.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 4. <U>Expenses</U>.
Harken shall pay all Registration Expenses whether or not any Registration
Statement is filed or becomes effective and whether or not any securities are
sold pursuant to any Registration Statement and, in any event, shall pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal and accounting duties), the expense
of any annual audit and the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
similar securities of Harken are then listed. All Selling Expenses incurred in
connection with a registration effected pursuant to the terms hereof shall be
borne by the seller or sellers of Registrable Securities pro rata based upon the
number of Registrable Securities included in such registration.</FONT></P>

<BR>
<BR>
<CENTER>4</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 5.
<U>Indemnification</U>.</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Harken shall indemnify and hold harmless, with respect to any and all
Registration Statements, each Holder of Registrable Securities covered by such
Registration Statement, and each other Person, if any, who controls such Holder
within the meaning of Section 15 of the Securities Act (collectively,
&#147;Holder Indemnified Parties&#148;), against all losses, claims, damages,
liabilities and expenses, joint or several, to which any such Holder Indemnified
Party may become subject under the Securities Act, the Exchange Act, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement in
which such Registrable Securities were included or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary Prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if Harken shall
have filed with the Commission any amendment thereof or supplement thereto), or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or (iii)
any violation by Harken of any federal, state or common law rule or regulation
applicable to Harken and relating to action of or inaction by Harken in
connection with any such registration; and in each such case, Harken shall
reimburse each such Holder Indemnified Party for any reasonable legal or other
expenses incurred by any of them in connection with investigating or defending
any such loss, claim, damage, liability, expense, action or proceeding;
provided, however, that Harken shall not be liable to any such Holder
Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability or expense (or action or proceeding, whether commenced or
threatened, in respect thereof) arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement or amendment thereof or supplement thereto or in any
such preliminary, final or summary Prospectus in reliance upon and in conformity
with written information furnished to Harken by or on behalf of any such Holder
Indemnified Party for use in the preparation thereof. Such indemnity and
reimbursement of expenses and other obligations shall remain in full force and
effect regardless of any investigation made by or on behalf of the Holder
Indemnified Parties and shall survive the transfer of such securities by such
Holder Indemnified Parties.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Each Holder of Registrable Securities participating in any registration
hereunder shall severally (and not jointly or jointly and severally) indemnify
and hold harmless Harken, its directors, officers, employees and agents, and
each Person who controls Harken (within the meaning of Section 15 of the
Securities Act) (collectively, &#147;Harken Indemnified Parties&#148;) against
all losses, claims, damages, liabilities and expenses to which any Harken
Indemnified Party may become subject under the Securities Act, the Exchange Act,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement in which such Holder&#146;s Registrable Securities were included or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary, final or summary Prospectus, together with the documents
incorporated by reference therein ( as amended or supplemented if Harken shall
have filed with the Commission any amendment thereof or supplement thereto), or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, to the
extent, in the cases described in clauses (i) and (ii), that such untrue
statement or omission was furnished in writing by such Holder for use in the
preparation thereof, or (iii) any violation by such Holder of any federal, state
or common law rule or regulation applicable to such Holder and relating to
action of or inaction by such Holder in connection with any such registration.
Such indemnity obligation shall remain in full force and effect regardless of
any investigation made by or on behalf of the Harken Indemnified Parties (except
as provided above) and shall survive the transfer of such securities by such
Holder.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Promptly after receipt by an indemnified party under subsection 5(a) or (b) of
written notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing with respect to which a claim
for indemnification may be made pursuant to this Section 5, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the indemnifying party of the threat or
commencement thereof; provided, however, that the failure to so notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. If any such claim or action
referred to under subsection (a) or (b) is brought against any indemnified party
and it then notifies the indemnifying party of the threat or commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense of any such claim or
action, the indemnifying party shall not be liable to such indemnified party
under this Section 5 for any legal expenses of counsel or any other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation unless the indemnifying
party has failed to assume the defense of such claim or action or to employ
counsel reasonably satisfactory to such indemnified party. Under no
circumstances will the indemnifying party be obligated to pay the fees and
expenses of more than one law firm for all indemnified parties. The indemnifying
party shall not be required to indemnify the indemnified party with respect to
any amounts paid in settlement of any action, proceeding or investigation
entered into without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld. No indemnifying party shall consent
to the entry of any judgment or enter into any settlement without the consent of
the indemnified party unless (i) such judgment or settlement does not impose any
obligation or liability upon the indemnified party other than the execution,
delivery or approval thereof, and (ii) such judgment or settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a full release and discharge from all liability in respect
of such claim for all persons that may be entitled to or obligated to provide
indemnification or contribution under this Section 5. </FONT></TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<CENTER>5</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(d)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Indemnification similar to that specified in the preceding subsections of this
Section 5 (with appropriate modifications) is hereby given by Harken and each
Holder of Registrable Securities with respect to any required registration or
qualification of securities under any state securities or blue sky laws. </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(e)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
If the indemnification provided for in this Section 5 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b),
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions or proceedings in respect thereof) referred to in
subsection (a) or (b) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other in connection with the statements, omissions, actions or
inactions which resulted in such losses, claims, damages, liabilities or
expenses as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party, any action or inaction by any such party, and the parties&#146; relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement, omission, action or inaction. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions or proceedings in respect thereof) pursuant to this
subsection (e) shall be deemed to include, without limitation, any reasonable
legal or other expenses incurred by such indemnified party in connection with
investigating or defending any such action or claim (which shall be limited as
provided in subsection (c) if the indemnifying party has assumed the defense of
any such action in accordance with the provisions thereof) which is the subject
of this subsection (e). No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an indemnified party under this
subsection (e) of written notice of the commencement of any action, suit,
proceeding, investigation or threat thereof made in writing with respect to
which a claim for contribution may be made against an indemnifying party under
this subsection (e), such indemnified party shall, if a claim for contribution
in respect thereof is to be made against an indemnifying party, give written
notice to the indemnifying party in writing of the commencement thereof (if the
notice specified in subsection (c) has not been given with respect to such
action); provided, however, that the failure to so notify the indemnifying party
shall not relieve it from any obligation to provide contribution which it may
have to any indemnified party under this subsection (e) except to the extent
that the indemnifying party is actually prejudiced by the failure to give
notice.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this paragraph were determined by pro rata allocation or by any
other method of allocation which does not take account the equitable
considerations referred to in the immediately preceding paragraph.</FONT></TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<CENTER>6</CENTER>
<BR>
<HR SIZE=5>

<PAGE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
If indemnification is available under Section 5, the indemnifying parties shall
indemnify each indemnified party to the fullest extent provided in subsections
(a) or (b), without regard to the relative fault of said indemnifying party or
any other equitable consideration provided for in this paragraph. The provisions
of this paragraph shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or contract,
shall remain in full force and effect regardless of any investigation made by or
on behalf of any indemnified party, and shall survive the transfer of securities
by any such party.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(f)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In connection with any underwritten offering contemplated by this Agreement
which includes Registrable Securities, Harken and all Holders of Registrable
Securities included in any Registration Statement shall agree to customary
provisions for indemnification and contribution (consistent with the other
provisions of this Section 5) in respect of losses, claims, damages, liabilities
and expenses of the underwriters of such offering. </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(g)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The indemnification obligations hereunder with respect to any Registration
Statement shall terminate three (3) years after the termination of the offering
of Registrable Securities covered by such Registration Statement.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 6. <U>Selection of
Underwriters</U>. The Holders of Registrable Securities shall have the right to
elect that the offering of Registrable Securities pursuant to a Registration
Statement filed under this Agreement be in the form of an underwritten offering
or a best efforts offering. If any registration hereunder is an underwritten
offering or a best efforts offering, the investment banker or investment bankers
and manager or managers that will administer the offering shall be selected by
Harken; provided, that such investment bankers and managers must be reasonably
satisfactory to the Holders of a majority of the Registrable Securities to be
registered in such registration.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 7. <U>Rule 144</U>.
Harken covenants to each Holder that, to the extent that Harken shall be
required to do so under the Exchange Act, Harken shall (a) timely file the
reports required to be filed by it under the Exchange Act or the Securities Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and (b) take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitations of the exemption provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission. Upon the request of any
Holder, Harken shall deliver to such Holder a written statement as to whether it
has complied with such requirements.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 8.
<U>Transferability</U>. Republic may transfer any or all of the Registrable
Securities issued under the Purchase Agreement to other parties who are Holders
of Republic&#146;s outstanding Debentures (&#147;Debenture Holder&#148;), and
Republic may transfer any or all of the Registrable Securities issued under the
Contingent Payment Agreement (attached as <U>EXHIBIT D</U> to the Purchase
Agreement) to the holders of Republic&#146;s Series C Redeemable Preferred Stock
(the &#147;Preferred Holders&#148;), provided such Debenture Holder or Preferred
Holder, as the case may be, first provides to Harken written representation that
such party constitutes an Accredited Investor as such term is defined in the
Securities Act. To the extent Republic does transfer any or all of the
Registrable Securities to one or more Debenture Holders or Preferred Holders in
accordance with this Section 8, then such Debenture Holders or Preferred Holders
shall accrue the rights, benefits and obligations of this Agreement to the same
extent as if they had originally been signature parties hereto.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Republic agrees and
warrants to Harken that any and all transfers of Registrable Securities to
Debenture Holders and Preferred Holders will be expressly made subject to the
terms of this Agreement.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Transfers of any or all of
the Registrable Securities except to Debenture Holders or Preferred Holders as
provided in this Section 8, or under an effective registration as provided under
this Agreement, may only be made with Harken&#146;s prior written consent, for
which consent Harken my require representations, indemnifications and warranties
regarding the proposed party to whom such transfer is requested.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 9.
<U>Miscellaneous</U>.</FONT></P>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
From and after the date of this Agreement, Harken will not, without the prior
written consent of the Holders of a majority of the Registrable Securities then
outstanding, enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the Holders of Registrable
Securities in this Agreement.</FONT></TD>
</TR>
</TABLE>
<BR>

<BR>
<BR>
<CENTER>7</CENTER>
<BR>
<HR SIZE=5>

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<BR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Investors agree, and each other Holder of Registrable Securities (including
Registrable Securities in any Registration Statement filed pursuant to this
Agreement) will be deemed to have agreed, as follows:</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
if any Registrable Securities are being registered in any registration pursuant
to this Agreement, the Holder thereof will comply with all anti-stabilization,
manipulation and similar provisions of Section 10 of the Exchange Act, and any
rules promulgated thereunder by the Commission, and, at the request of Harken,
will execute and deliver to Harken and to any underwriter participating in such
offering, an appropriate agreement to such effect; and</FONT></TD>
</TR>
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<BR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)</FONT></TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
at the end of any period during which Harken is obligated to keep a Registration
Statement current and effective as described herein, the Holders of Registrable
Securities included in this Registration Statement shall discontinue sales
thereof pursuant to such Registration Statement.</FONT></TD>
</TR>
</TABLE>
<BR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All questions concerning the construction, validity and interpretation of this
Agreement and all actions, proceedings and matters arising out of this Agreement
shall be governed by the internal law, and not the law of conflicts, of the
State of Texas.</FONT></TD>
</TR>
</TABLE>
<BR>
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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All covenants and agreements in this Agreement by or on behalf of any of the
parties hereto will bind and inure to the benefit of the respective successors
and assigns of the parties hereto whether expressed or not.</FONT></TD>
</TR>
</TABLE>
<BR>
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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter herein
contained. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to the
registration rights granted by Harken to the Holders of the Registrable
Securities. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.</FONT></TD>
</TR>
</TABLE>
<BR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All notices, demands or other communications to be given or delivered under or
by reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when delivered personally or sent by reputable express
courier service (charges prepaid), or mailed to the recipient by certified or
registered mail, return receipt requested and potage prepaid, or sent by
telefax, to the parties at the following address (or to such other address or to
the attention of such other person as the recipient party has specified by prior
like notice to the sending party):</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>If to Harken</U>:</FONT></p>
<BR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Harken Energy Corporation<BR>
580 WestLake Park Blvd., Suite 600<BR>
Houston, Texas 77079<BR>
Telecopier No.: (281) 504-4110<BR>
Attention: Bruce N. Huff President and<BR>
Larry E. Cummings, General Counsel</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>If to Republic</U>:</FONT></P>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Republic Resources, Inc.<BR>
743 Horizon Ct., Suite 333<BR>
Grand Junction, Colorado 81506-8715<BR>
Tel:  (970) 245-5917<BR>
Telecopier No.:  (970) 243-8840<BR>
Attention:  Patrick J. Duncan, President</FONT></TD>
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<CENTER>8</CENTER>
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<HR SIZE=5>

<PAGE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>With a copy to</U>:</FONT></P>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Alan W. Peryam, Esq.<BR>
1120 Lincoln Street, Suite 1000<BR>
Denver, Colorado 80203<BR>
Tel:  (303) 866-0900<BR>
Telecopier No.:   (303) 866-0999</FONT></TD>
</TR>
</TABLE>
<BR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
If any provision of this Agreement is held to be unenforceable, this Agreement
shall be considered divisible and such provision shall be deemed inoperative to
the extent it is deemed unenforceable, and in all other respects of this
Agreement shall remain in full force and effect; provided, however, that if any
such provision may be made enforceable by limitation thereof, then such
provision shall be deemed to be so limited and shall be enforceable to the
maximum extent permitted by applicable law.</FONT></TD>
</TR>
</TABLE>
<BR>
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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
This Agreement may be executed by the parties hereto in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same agreement. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all, the
parties hereto.</FONT></TD>
</TR>
</TABLE>
<BR>
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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Each Holder of Registrable Securities, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. Harken agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of breach by it of the provisions of this Agreement and hereby agree to
waive (to the extent permitted by law) the defense in any action for specific
performance that a remedy of law would be adequate.</FONT></TD>
</TR>
</TABLE>
<BR>
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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(10)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In any action or proceeding brought to enforce any provision of this Agreement,
or where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorney&#146;s fees in addition
to any other available remedy.</FONT></TD>
</TR>
</TABLE>
<BR>
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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(11)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Harken agrees to remove any legends on certificates representing Registrable
Securities describing transfer restrictions applicable to such securities upon
the sale of such securities (i) pursuant to an effective Registration Statement
under the Securities Act or (ii) in accordance with the provisions of Rule 144
under the Securities Act.</FONT></TD>
</TR>
</TABLE>
<BR>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written above.</FONT></P>
<PRE>
                                                          HARKEN ENERGY CORPORATION


                                                 By:      ____________________________________
                                                          Name:  Bruce N. Huff
                                                          Title:  President


                                                          REPUBLIC RESOURCES, INC.


                                                 By:      ____________________________________
                                                          Name:  Patrick. J. Duncan
                                                          Title:  President

</PRE>

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<CENTER>9</CENTER>
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