{"id":43321,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/asset-purchase-and-sale-agreement-st-martinville-partners.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"asset-purchase-and-sale-agreement-st-martinville-partners","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/asset-purchase-and-sale-agreement-st-martinville-partners.html","title":{"rendered":"Asset Purchase and Sale Agreement &#8211; St. Martinville Partners Ltd., Bargo Energy Co., Harken Energy Corp. and Harken Exploration Co."},"content":{"rendered":"<pre>                        ASSET PURCHASE AND SALE AGREEMENT\n\n                                      AMONG\n\n                       ST. MARTINVILLE PARTNERS, LTD. AND\n\n                BARGO ENERGY COMPANY, COLLECTIVELY AS SELLER, AND\n\n                          HARKEN ENERGY CORPORATION AND\n\n                HARKEN EXPLORATION COMPANY, COLLECTIVELY AS BUYER\n\n                               DATED MAY 19, 1998\n\n\n   2\n\n\n\n                        ASSET PURCHASE AND SALE AGREEMENT\n\n\n         This Asset Purchase and Sale Agreement (\"Agreement\") is entered into\nthis 19th day of May, 1998, among St. Martinville Partners, Ltd., a Texas\nlimited partnership (\"SMPL\"), and Bargo Energy Company, a Texas general\npartnership (\"Bargo\"), and Harken Energy Corporation, a Delaware corporation\n(\"Harken Energy\") and Harken Exploration Company, a Delaware corporation\n(\"Exploration\"). SMPL and Bargo are called herein collectively \"Seller\". Harken\nEnergy and Exploration are called herein collectively \"Buyer\". Buyer and Seller\nare called herein collectively the \"Parties.\"\n\n                                   WITNESSETH:\n\n         WHEREAS, Seller desires to sell to Buyer certain producing,\nnonproducing and undeveloped oil and gas properties and other related assets and\nBuyer desires to purchase such properties and assets upon and subject to the\nterms and conditions hereinafter provided.\n\n         NOW, THEREFORE, in consideration of the premises and the mutual\npromises herein made, and in consideration of the representations, warranties,\nand covenants herein contained, the Parties agree as follows:\n\n                                    ARTICLE 1\n                                   DEFINITIONS\n\n         Capitalized terms used in this Agreement have the meanings given such\nterms in this Article 1 or elsewhere in this Agreement.\n\n         \"Additional Shares\" has the meaning set forth in Article 13.02.\n\n         \"Affiliate\"means (i) with respect to the Seller, any corporation,\nlimited liability company, association, partnership or person that directly or\nindirectly, through one or more intermediaries, controls, is controlled by, or\nunder common control with, the Seller, and (ii) any Seller's officers, directors\nand shareholders.\n\n         \"Assets\" means Seller's right, title and interest in and to the\nfollowing (except to the extent constituting Excluded Assets):\n\n         (i)      All of the stated working interests in the Wells described on\n                  Exhibit \"A\" hereto, an equal undivided interest in the\n                  Equipment used in producing, operating and maintaining each\n                  Well respectively, and an equal undivided interest in the\n                  Units described or referred to on Exhibit \"A\";\n\n\n                                       1\n\n   3\n\n\n\n         (ii)     75% of Seller's interests in the Mineral Interests described\n                  on Exhibit \"A-1\" (St. Martinville Prospect Area) hereto and\n                  the Lands covered thereby from the surface down to the base of\n                  the Discorbis 4 Sand and an equal undivided interest in the\n                  Equipment located thereon and used in connection therewith to\n                  the extent such Equipment is not described in (i) above;\n\n         (iii)    75% of Seller's interests in all of the Mineral Interests\n                  described on Exhibit \"A-2\" (S. Bayou Boeuf Prospect Area)\n                  hereto and the Lands covered thereby and an equal undivided\n                  interest in the Equipment located thereon and used in\n                  connection therewith to the extent such Equipment is not\n                  described in (i) above;\n\n         (iv)     50% of Seller's interests in all of the Mineral Interests\n                  described on Exhibit \"A-3\" (Bol Mex Prospect Area) hereto and\n                  the lands covered thereby and an equal undivided interest in\n                  the Equipment located thereon and used in connection therewith\n                  to the extent such Equipment is not described in (i) above;\n\n         (v)      To the extent the following relate to any of the property\n                  described in (i), (ii), (iii) or (iv), the same undivided\n                  interest as specified for the related property above: All of\n                  the licenses, permits, contracts, agreements and other\n                  instruments owned by Seller (other than bonds posted by\n                  Seller) which concern and relate to any of the Wells, Mineral\n                  Interests, Lands, and\/or Equipment insofar as same concern or\n                  relate to the Wells, Mineral Interests, Lands, and\/or\n                  Equipment, or the operation thereof, including, without\n                  limitation, oil, gas and condensate purchase and sale\n                  contracts; permits; rights-of-way; easements; licenses;\n                  servitudes; estates; surface leases; farmin and farmout\n                  agreements; division orders and transfer orders; bottomhole\n                  agreements; dry hole agreements; area-of-mutual interest\n                  agreements; salt water disposal agreements; geologic and\n                  geophysical agreements; acreage contribution agreements;\n                  operating agreements; balancing agreements; and unit\n                  agreements; pooling agreements; pooling orders;\n                  communitization agreements; processing, gathering, compression\n                  and transportation agreements; facilities or equipment leases\n                  relating thereto or used or held for use in connection with\n                  the ownership or operation thereof or with the production,\n                  treatment, sale or disposal of Hydrocarbons; and all other\n                  contracts and agreements related to the Wells, Mineral\n                  Interests, Lands, and\/or Equipment;\n\n         (vi)     To the extent the following relate to any of the property\n                  described in (i), (ii), (iii) or (iv), an undivided interest\n                  that corresponds to the interest in such property to be\n                  conveyed hereunder: All Records and, to the extent\n                  transferable, all other contract rights, intangible rights\n                  (excluding Seller's trademarks and service marks), inchoate\n                  rights, choses in action, rights under warranties made by\n                  prior owners, manufacturers, vendors or other third parties,\n                  and rights accruing under applicable statutes of limitation or\n                  prescription; and\n\n\n\n\n                                      2\n\n   4\n\n\n\n         (vii)    To the extent the following relate to any of the property\n                  described in (i), (ii), (iii) or (iv), an undivided interest\n                  that corresponds to the interest in such property to be\n                  conveyed hereunder: All payments, and all rights to receive\n                  payments, with respect to the ownership of the production of\n                  Hydrocarbons from, or the conduct of operations on, the Assets\n                  and the interests to be conveyed to Buyer hereunder accruing\n                  after the Effective Date.\n\n         \"Bol Mex Prospect Area\" shall mean the area described on Exhibit \"A-3\".\n\n         \"Buyer\" has the meaning set forth in the preface to this Agreement.\n\n         \"Buyer Indemnified Party\" has the meaning provided in Article 7.03.\n\n         \"Closing\" has the meaning set forth in Article 3.04 hereof.\n\n         \"Closing Date\" has the meaning set forth in Article 3.04 hereof.\n\n         \"Closing Shares\" has the meaning set forth in Article 3.01(a) hereof.\n\n         \"Code\" means the Internal Revenue Code of 1986, as amended.\n\n         \"Commission\" means the Securities and Exchange Commission (or any \nsuccessor body thereto).\n\n         \"Conveyance Documents\" means the Assignment, Bill of Sale and\nConveyance in the form attached hereto as Exhibit \"B\", together with those other\nforms of assignments, bills of sale, deeds and other instruments the Parties\nagree are necessary or appropriate to convey title to the Assets or Option\nAssets from Seller to Buyer.\n\n         \"Easement Agreement\" has the meaning set forth in Article 8.04.\n\n         \"Effective Date\" means 7:00 a.m. local time with respect to each of the\nAssets on January 1, 1998.\n\n         \"Equipment\" means all the tangible personal property, tools, machinery,\nmaterials, pipelines, gas plants, gathering systems, equipment, fixtures and\nimprovements, which are incident or attributable to the Wells, Mineral\nInterests, Lands and\/or Units or with the production, treatment, sale or\ndisposal of Hydrocarbons or water produced therefrom or attributable thereto, on\nthe Effective Date, including the personal property, materials and equipment\nlisted on Exhibit \"C\" hereto.\n\n         \"Examination Period\" has the meaning set forth in Article 6.02.\n\n\n\n\n                                      3\n\n   5\n\n\n\n         \"Excluded Assets\" has the meaning set forth in Article 2.01(b) hereof.\n\n         \"Expiring Leases\" has the meaning set forth in Article 8.03(b).\n\n         \"Fee Tract\" has the meaning set forth in Article 2.01(b).\n\n         \"Final Settlement Date\" has the meaning set forth in Article 9(h).\n\n         \"Final Settlement Statement\" has the meaning set forth in Article 9(h).\n\n         \"Governmental Approvals\" has the meaning set forth in Article 14.\n\n         \"Hydrocarbons\" means crude oil, natural gas, casinghead gas, coalbed\nmethane, condensate, helium, sulphur, S02, C02, natural gas liquids and other\ngaseous and liquid hydrocarbons or any combination thereof.\n\n         \"Imbalances\" has the meaning set forth in Article 9(f).\n\n         \"Indemnifying Party\" has the meaning set forth in Article 7.04(a) \nhereof.\n\n         \"Lands\" means the lands covered by the Mineral Interests.\n\n         \"Leases\" means the oil and gas leases or oil, gas, and mineral leases\nshown in Exhibits \"A- 1\", \"A-2\" and \"A-3\" hereto or that cover any portion of\nthe area described in such Exhibits.\n\n         \"Loss\" or \"Losses\" means all damages, payments, penalties, fines,\nassessments, costs, amounts paid in settlement, obligations, taxes, losses\n(including reductions in the value of Assets), liabilities, expenses and fees\nincurred, including court costs and attorneys' fees and expenses and costs of\ninvestigating, preparing or defending any action or proceeding, provided,\nhowever, that Buyer shall be deemed to have incurred a Loss or Losses only if,\nand only to the extent that, the cumulative aggregate of all such Loss or Losses\nattributable to or arising in connection with the portion of the Assets acquired\nfrom SMPL exceeds $74,000 or the cumulative aggregate of all such Loss or Losses\nattributable to or arising in connection with the portion of the Assets acquired\nfrom Bargo exceeds $126,000.\n\n         \"Mineral Interests\" means the Leases and any mineral interest owned by\nSeller in and to the lands described on Exhibits \"A-1\", \"A-2\" and \"A-3\".\n\n         \"NRI\" means a fractional or percentage interest in and to all\nHydrocarbons produced from or allocated to a Well or Unit described on Exhibit\n\"A\" after deduction of all lessors' royalties, overriding royalties, and other\nburdens and payments out of production that burden such fractional or percentage\ninterest in such Well or Unit.\n\n\n\n\n                                      4\n\n   6\n\n\n\n         \"Operating Agreement\" has the meaning set forth in Article 2.01(b).\n\n         \"Option Assets\" has the meaning set forth in Article 13.01.\n\n         \"Option Closing\" has the meaning set forth in Article 13.02.\n\n         \"Parties\" has the meaning set forth in the preface above.\n\n         \"Permitted Encumbrances\" means, with respect to the Assets, the \nfollowing:\n\n         (i)      liens for taxes not yet due or, if due, being challenged in \n                  good faith by appropriate proceedings;\n\n         (ii)     materialmen's, mechanics' and other similar liens or charges\n                  arising in the ordinary course of business for obligations\n                  that are not delinquent and that will be paid or discharged in\n                  the ordinary course of business or, if delinquent, that are\n                  being contested in good faith in the ordinary course of\n                  business;\n\n         (iii)    easements, rights-of-way, servitudes, permits, surface leases,\n                  and other rights granted to or reserved for third parties in\n                  respect of surface operations (including without limitation\n                  those rights set forth in Exhibit \"D\" attached hereto and made\n                  a part hereof for all purposes) that do not materially\n                  interfere with the operation of the portion of the Assets\n                  burdened thereby;\n\n         (iv)     rights reserved to or vested in any governmental authority to\n                  control or regulate any of the Wells or Units and all\n                  applicable laws, rules, regulations and orders of such\n                  authorities so long as the same:\n\n                  (a)      do not decrease Seller's NRI below the NRI shown in\n                           Exhibit \"A\" or increase Seller's WI above the WI\n                           shown in Exhibit \"A\" without at least a proportion\n                           ate increase in Seller's NRI, or\n\n                  (b)      do not create any liens in respect of such Wells or \n                           Units;\n\n         (v)      liens arising under operating agreements, unitization and\n                  pooling agreements, orders and statutes and production sales\n                  contracts securing amounts not yet due or, if due, being\n                  contested in good faith in the ordinary course of business as\n                  set forth in Exhibit \"E\" attached hereto and made a part\n                  hereof for all purposes;\n\n         (vi)     the terms and conditions of all contracts and agreements\n                  relating to the Leases and Wells, including, without\n                  limitation, exploration agreements, gas sales contracts,\n                  processing agreements, farmins, farmouts, operating\n                  agreements, and right-of-way agreements, to the extent such\n                  terms and conditions:\n\n\n\n                                      5\n\n   7\n\n\n\n                  (a)      do not decrease Seller's NRI below the NRI shown in\n                           Exhibit \"A\" or increase Seller's WI above the WI\n                           shown in Exhibit \"A\" without at least a proportion\n                           ate increase in Seller's NRI,\n\n                  (b)      are normal and customary in the oil and gas industry\n                           in the area in which the affected Assets are located,\n                           and\n\n                  (c)      would not conflict with any other portion of this\n                           definition of Permitted Encumbrances;\n\n         (vii)    royalties, overriding royalties, net profits interests,\n                  production payments, reversionary interests, and similar\n                  interests that do not decrease Seller's NRI below the NRI\n                  shown in Exhibit \"A\" or increase Seller's WI above the WI\n                  shown in Exhibit \"A\" without at least a proportionate increase\n                  in Seller's NRI;\n\n         (viii)   conventional rights of reassignment requiring notice to the\n                  holders of the rights prior to surrendering or releasing a\n                  leasehold interest; and\n\n         (ix)     calls on production exercisable only at prices substantially\n                  equivalent to then current fair market value.\n\n         (x)      the absence of Governmental Approvals other than Governmental\n                  Approvals that were applicable to a previous transaction\n                  involving the transfer of all or any portion of the Assets but\n                  were not complied with at the time of the consummation of such\n                  transaction.\n\n         \"Phase I Environmental Audit\" means an assessment of Seller's\ncompliance with Environmental Laws relative to the Assets consisting of\nexamination of Seller's files and public documents, interviews of personnel of\nSeller and of other appropriate persons and visual inspection of the Assets.\n\n         \"Preference Right\" means any preemptive right, option or preferential\nright to purchase any portion of the Assets held by any person or entity other\nthan Buyer.\n\n         \"Product Contracts\" has the meaning given set forth in Article 4.01(m).\n\n         \"Purchase Price\" has the meaning given set forth in Article 3.01.\n\n         \"Records\" means all originals, copies, computer tapes and discs, files,\nrecords, information or data relating to the Assets in the possession of Seller,\nor in the possession of any agent for the Seller, including, without limitation,\ntitle records (including abstracts of title, title opinions, certificates of\ntitle and title curative documents), accounting records and files, contracts,\ncorrespondence, production records, electric logs, core data, pressure data,\ndecline curves, graphical\n\n\n\n                                      6\n\n   8\n\n\n\nproduction curves, geologic and geophysical information, drilling reports, well\ncompletion reports, drill stem test charts and reports, engineering reports,\nregulatory reports, and all related materials, insofar as the foregoing items\nconstitute materials that may be lawfully conveyed to Buyer (i.e. the materials\nare not subject to a proprietary agreement precluding their transfer to Buyer).\n\n         \"Records Delivery Date\" has the meaning given set forth in Article\n13.03(a).\n\n         \"Registration Rights Agreement\" has the meaning set forth in Article\n11.01(c).\n\n         \"Related Agreements\" means the Conveyance Documents, the Easement\nAgreement and the Registration Rights Agreement.\n\n         \"Remaining Purchase Price\" means $4,000,000, subject to adjustment in\naccordance with Article 8.03(b) and Article 6.02.\n\n         \"Reserve Shares\" has the meaning set forth in Article 3.01(b).\n\n         \"S. Bayou Boeuf Prospect Area\" shall mean the area described on Exhibit\n\"A-2\".\n\n         \"Seller\" has the meaning set forth in the preface to this Agreement.\n\n         \"Seller Indemnified Party\" has the meaning given to it in Article 7.02.\n\n         \"Shares\" means shares of the common stock, $0.01 par value per share,\nof Harken Energy.\n\n         \"St. Martinville Prospect Area\" shall mean the area described on\nExhibit \"A-1\".\n\n         \"Survival Period\" has the meaning set forth in Article 7.01 hereof.\n\n         \"Taxes\" has the meaning set forth in Article 9.\n\n         \"Third Party Claim\" has the meaning set forth in Article 7.04(a)\nhereof.\n\n         \"Transfer Requirements\" means all consents, approvals, authorizations\nor permits of, or filings with or notifications to, any third party which must\nbe obtained, made or complied with for or in connection with the transactions\ncontemplated by this Agreement in order (a) for such transactions to be\neffective, (b) to prevent any termination, cancellation, default, acceleration\nor change in terms (or any right arising therefrom) under any terms, conditions\nor provisions of any Asset (or of any agreement, instrument or obligation\nrelating to or burdening any Asset or any interest therein or portion thereof)\nas a result of such transactions, or (c) to prevent the creation or imposition\nof any lien, charge, penalty, restriction, security interest or encumbrance on\nor with respect to any Asset or any interest therein or portion thereof (or any\nright arising therefrom) as a result of such transactions.\n\n\n\n                                      7\n\n   9\n\n\n\n         \"Units\" means all unitization, communitization, pooling agreements,\nworking interest units created by operating agreements, and orders covering the\nlands subject to the Leases, or any portion thereof, and the units and pooled or\ncommunitized areas created thereby.\n\n         \"Wells\" means wells for the production of Hydrocarbons which are listed\nin Exhibit \"A\" or which are located on the Lands.\n\n         \"WI\" means a fraction or percentage of the costs and expenses\nassociated with the maintenance, exploration, development, operation and\nabandonment of a Well or Unit described on Exhibit \"A\".\n\n                                    ARTICLE 2\n                      SALE AND PURCHASE; OPTION TO PURCHASE\n\n         2.01     Sale and Purchase.\n\n         (a)      INCLUDED ASSETS. Subject to the terms and conditions of this\n                  Agreement and in consideration of Buyer's payment to Seller of\n                  the Purchase Price as provided in this Agreement, the Buyer\n                  agrees to purchase from the Seller, and the Seller agrees to\n                  sell and convey to Buyer, the Assets.\n\n         (b)      EXCLUDED ASSETS. Notwithstanding anything herein provided to\n                  the contrary, the term \"Assets\" as used in this Agreement\n                  shall not include, and there is excepted, reserved and\n                  excluded from the sale contemplated hereby the following\n                  (\"Excluded Assets\"): (i) all cash, deposits, checks, funds,\n                  accounts receivable, notes receivable, or similar items\n                  attributable to the Assets with respect to any period of time\n                  prior to the Effective Date, except for those funds in\n                  suspense accounts to be delivered to Buyer pursuant to Article\n                  8.01(b) hereof and (ii) all Hydrocarbon production from or\n                  attributable to the Assets with respect to all periods prior\n                  to the Effective Date and all proceeds attributable thereto,\n                  and all Hydrocarbons that, at the Effective Date, are owned by\n                  Seller and are in storage or otherwise held in inventory and\n                  all proceeds attributable thereto, and those listed in Exhibit\n                  \"H\" and the following:\n\n                           (i)      the surface estate in and to the tract in\n                                    the St. Martinville Prospect Area described\n                                    under Lease No. R133-000 on Exhibit \"A-1\"\n                                    (the \"Fee Tract\");\n\n                           (ii)     25% of the Seller's interest in the St.\n                                    Martinville Prospect Area, and the right to\n                                    act as operator for the St. Martinville\n                                    Prospect Area;\n\n                           (iii)    25% of the Seller's interest in the S. Bayou\n                                    Boeuf Prospect Area, and the right to act as\n                                    operator for the S. Bayou Boeuf Prospect\n                                    Area;\n\n\n\n\n                                      8\n\n   10\n\n\n\n                           (iv)     50% of the Seller's interest in the Bol Mex\n                                    Prospect Area, and the right to act as\n                                    operator for the Bol Mex Prospect Area.\n\n         Subsequent to the Effective Date, the form of Operating Agreement\nattached hereto as Exhibit \"K\" (the \"Operating Agreement\") will govern\noperations on the the St. Martinville Prospect Area and the Bol Mex Prospect\nArea. At the Closing, the Parties will execute separate Operating Agreements\ncovering each of those prospect areas.\n\n         (c)      OPTION TO PURCHASE. The Buyer will have, and the Seller hereby\n                  grants to Buyer, a continuing option, on the terms set forth\n                  in Article 13.01 below, for a period of one (1) year following\n                  the Closing Date to purchase from Seller all of Seller's\n                  remaining interest in the St. Martinville Prospect Area and in\n                  the S. Bayou Boeuf Prospect Area (including the right to\n                  operate both areas).\n\n\n                                    ARTICLE 3\n                                 PURCHASE PRICE\n\n         3.01 Purchase Price. In consideration for the sale and conveyance to\nBuyer of the Assets, subject to the terms and conditions hereof, the Buyer\nagrees to tender and deliver to the Seller in the manner hereinafter provided\nshares of its capital stock as consideration (the \"Purchase Price\"), that is of\nan aggregate value, which the Parties agree is equal to Twenty Million Two\nHundred Fifty Thousand Dollars ($20,250,000):\n\n         (a)      Harken Energy will issue and deliver to the Seller following\n                  Closing, at the time, in the amount, and in the manner\n                  described in Article 8.03(a), the number of Shares equal in\n                  value to Sixteen Million Two Hundred Fifty Thousand Dollars\n                  ($16,250,000) which the parties hereto have calculated to be\n                  2,716,483 (the \"Closing Shares\").\n\n         (b)      Harken Energy will withhold from the Purchase Price that\n                  number of shares (the \"Reserve Shares\") which are equal in\n                  value to $4 million as a contingency against Seller obtaining\n                  new or renewal leases under St. Martinville Prospect Area as\n                  described in Article 8.03(b) and the need for environmental\n                  compliance operations under Article 6.02.\n\n         3.02 The Closing. The closing of the transactions contemplated by this\nAgreement (the \"Closing\") will take place at the offices of the Buyer, 5605\nNorth MacArthur, Suite 400, Irving, Texas 75038, simultaneously with the\nexecution of this Agreement on May 19, 1998, or at such other place, date and\ntime as the Buyer and the Seller may mutually determine (the \"Closing Date\").\n\n\n\n\n                                      9\n\n   11\n\n\n\n         3.03 Allocation of Purchase Price. The Closing Shares and the Reserve\nShares shall be allocated and deliverable in the proportion of thirty-seven\npercent (37%) to SMPL and sixty-three percent (63%) to Bargo.\n\n         3.04 Deliveries at the Closing. At the Closing or as otherwise set\nforth in Article 11, (i) the Seller will deliver to the Buyer the documents\nreferred to in Article 11.01 below, and (ii) the Buyer will deliver to the\nSeller the documents referred to in Article 11.02 below.\n\n\n                                    ARTICLE 4\n                         REPRESENTATIONS AND WARRANTIES\n\n         4.01 Representations and Warranties of Seller. Seller represents and\nwarrants to Buyer that the statements contained in this Article 4.01 are true\nand correct as of the Closing Date:\n\n         (a)      SMPL is a limited partnership and Bargo is a general\n                  partnership, each of which is duly organized, validly existing\n                  and in good standing under the laws of the State of Texas, and\n                  is qualified to do business and in good standing under the\n                  laws of the State of Louisiana.\n\n         (b)      Each Seller has all requisite power and authority, limited\n                  partnership or corporate and otherwise, to carry on its\n                  business as presently conducted, to enter into this Agreement\n                  and the Related Agreements, to perform its obligations under\n                  this Agreement and the Related Agreements.\n\n         (c)      The execution and delivery of this Agreement and the Related\n                  Agreements have been, and the execution and delivery of all\n                  certificates, documents and instruments required to be\n                  executed and delivered by the Seller at Closing, and the\n                  consummation of the transactions contemplated hereby and\n                  thereby as of the Closing Date shall have been duly authorized\n                  by all necessary limited partnership action on the part of the\n                  Seller. No further authorization is required by any law,\n                  statute, regulation, court order or judgment applicable to the\n                  Seller. This Agreement and the Related Agreements constitute\n                  the legal, valid and binding obligations the Seller\n                  enforceable in accordance with their respective terms, subject\n                  however, to the effects of bankruptcy, insolvency,\n                  reorganization, moratorium and similar laws, as well as to\n                  principles of equity (regardless of whether such\n                  enforceability is considered in a proceeding in equity or at\n                  law). After Closing, the Seller will have the ability to\n                  continue in its same business without a fundamental change in\n                  the nature or scope of its business.\n\n         (d)      The execution and delivery of the Agreement and the Related\n                  Agreements and the consummation of the transactions\n                  contemplated hereby and thereby will not (i) violate, or be in\n                  conflict with, any provisions of the Seller's agreement of\n                  limited\n\n\n\n                                     10\n\n   12\n\n\n\n                  partnership or other governing documents, (ii) constitute a\n                  breach of, or any event of default under, any contract or\n                  agreement to which the Seller is a party or by which it or its\n                  assets are bound, or constitute the happening of an event or\n                  condition upon which any other party to such a contract or\n                  agreement may exercise any right or option which will\n                  materially adversely affect any of the Assets, (iii) violate\n                  any judgment, decree, order, statute, rule or regulation\n                  applicable to Seller, or (iv) result in any material liability\n                  to Buyer under the terms of any contracts or agreements.\n\n         (e)      Except as set forth on Exhibit \"J\" hereto, no suit, action or\n                  other proceeding is pending before any court or any\n                  governmental agency as of the date of this Agreement to which\n                  the Seller is a party or which involves the Assets and which\n                  might result in a material impairment or loss of the Seller's\n                  title to the Assets or that might materially hinder or impede\n                  the operation of the Assets or the ability of the Seller to\n                  perform its obligations under this Agreement or under the\n                  Related Agreements. Seller will promptly give the Buyer notice\n                  of any such proceeding arising prior to or after the Closing\n                  with respect to which it has notice. The Seller has received\n                  no notice of any pending or threatened action, suit,\n                  proceeding, inquiry or investigation, at law or in equity,\n                  before or by any court, governmental agency, public board or\n                  body against or affecting the Seller or the Assets that\n                  questions the powers and authority of the Seller to enter into\n                  or perform its obligations under this Agreement or the Related\n                  Documents or to carry out the transactions on its part\n                  described in this Agreement or the Related Documents or the\n                  power of the Borrower to own and dispose of the Assets.\n\n         (f)      Seller has no knowledge of material defects or breakage in the\n                  Equipment to be conveyed in whole or in part to Buyer pursuant\n                  to the terms hereof, and to the best of Sellers knowledge, all\n                  the Equipment is in working order as of the Closing Date. As\n                  used in this Article 4.01(f), a material defect or breakage\n                  means any defect that requires repair or replacement of any\n                  personal property or fixtures conveyed herein to Buyer\n                  requiring an expenditure by Buyer in excess of $50,000 per\n                  defect, or $100,000 in the aggregate for all defects and\n                  breakage.\n\n         (g)      All royalties, rentals and other payments due with respect to\n                  the Mineral Interests have been properly and timely paid as\n                  prescribed by the Leases governing them. All conditions\n                  necessary to keep the Leases in force have been fully\n                  performed no notices have been received by Seller of any claim\n                  to the contrary and all of the Leases are in full force and\n                  effect.\n\n         (h)      Prior to the Closing Date, (i) Seller is not obligated by\n                  virtue of any prepayment arrangement under any contract for\n                  the sale of hydrocarbons and containing a \"take or pay\" or\n                  similar provision to deliver Hydrocarbons produced from the\n                  Assets at some future time without then or thereafter\n                  receiving full payment therefor, and (ii) Seller has not\n                  produced a share of gas materially greater than its ownership\n\n\n\n                                     11\n\n   13\n\n\n\n                  percentage and Seller is under no obligation to reduce its\n                  share of production under any gas balancing agreement or\n                  similar contract to allow under-produced parties to come back\n                  into balance.\n\n         (i)      All ad valorem, property, production, severance and similar\n                  taxes and assessments based an or measured by the ownership of\n                  property or the production of Hydrocarbons or the receipt of\n                  proceeds therefrom on the Assets have been properly paid and\n                  all such taxes and assessments which become due and payable\n                  prior to the Closing Date shall have been properly paid by\n                  Seller.\n\n         (j)      All laws, regulations and orders of all governmental agencies\n                  having jurisdiction over the Assets or operations conducted\n                  thereon have, to Seller's knowledge, been and shall continue\n                  to be complied with in all material respects until the Closing\n                  Date. Seller has obtained all material necessary permits from\n                  governmental agencies having jurisdiction in connection with\n                  the Assets, including, without limitation, the injection and\n                  disposal of salt water, or operations conducted thereon and\n                  have timely, properly and accurately made and will continue to\n                  timely, properly and accurately make all filings required by\n                  all governmental agencies with respect to the Assets or\n                  operations conducted thereon.\n\n         (k)      Seller has not incurred liability, contingent or otherwise,\n                  for brokers' or finders' fees relating to the transactions\n                  contemplated by this Agreement or the Related Agreements for\n                  which Buyer shall have any responsibility whatsoever.\n\n         (l)      With respect to the Basic Documents (defined below), in all\n                  material respects (i) the Basic Documents all are in full\n                  force and effect and are the valid and legally binding\n                  obligations of the parties thereto and are enforceable in\n                  accordance with their respective terms; (ii) Seller is not in\n                  breach or default with respect to any of its material\n                  obligations pursuant to any such Basic Document or any\n                  regulations incorporated therein or governing same; (iii) all\n                  material payments (including, without limitation, royalties,\n                  delay rentals, shut-in royalties, or payments, fees for salt\n                  water disposal or injection, and joint interest or other\n                  billings under unit or operating agreements) due from Seller\n                  thereunder have been made by Seller; (iv) to Seller's\n                  knowledge no other party to any Basic Document (or any\n                  successor in interest thereto) is in breach or default with\n                  respect to any of their material obligations thereunder; (v)\n                  neither the Seller nor, to Seller's knowledge, any other party\n                  to any Basic Document has given or threatened to give notice\n                  of any action to terminate, cancel, rescind or procure a\n                  judicial determination of any Basic Document or any provision\n                  thereof; and (vi) the execution and delivery of this Agreement\n                  and the Related Agreements and the consummation of the\n                  transactions contemplated hereby and thereby will not result\n                  in a breach of, constitute a default under, or result in a\n                  violation of the material provisions of any Basic Document and\n                  none of the Basic Documents will require, after the Effective\n                  Date, that any advance payments be made\n\n\n\n                                     12\n\n   14\n\n\n\n                  to any party other than those required under operating\n                  agreements. As used herein the term \"Basic Documents\" shall\n                  mean the Leases, the Product Contracts (defined below),\n                  partnership, joint venture, limited partnership, farmout, dry\n                  hole, bottom hole, operating agreements, acreage contribution,\n                  purchase and acquisition agreements, area of mutual interest\n                  agreements and salt water disposal and\/or injection\n                  agreements, servicing contracts, casement and\/or right-of-way\n                  agreements, surface leases, surface use agreements,\n                  unitization or pooling agreements and all other material\n                  executory contracts and agreements relating to the Assets,\n                  including, without limitation, those contracts and agreements\n                  described in Article 4.01(m) hereto.\n\n         (m)      Other than agreements which are cancellable on 90 days notice\n                  or less without material penalty or detriment, all product\n                  purchase agreements and all agreements relating to or\n                  affecting the purchase, sale, gathering, delivery,\n                  compressing, transporting, processing, marketing or any other\n                  disposition of the gas and condensate produced from or\n                  attributable to the Assets are described on Exhibit \"F\"\n                  attached hereto and made a part hereof under the heading\n                  \"Product Contracts,\" and are herein referred to as the\n                  \"Product Contracts\".\n\n         (n)      Seller has good and valid title to the Assets subject to\n                  Permitted Encumbrances. Exhibit \"A-1\", \"A-2\" and \"A-3\"\n                  contains a list of all Mineral Interests and other mineral\n                  estates and interests within the Lands owned by Seller and is\n                  true and correct, except as otherwise noted therein; provided,\n                  however, that title to the Leases shall be assigned to Buyer\n                  with warranties of title by, through and under Seller and its\n                  Affiliates who are predecessors to Seller's title, but not\n                  otherwise.\n\n         (o)      The Mineral Interests entitle Seller to receive not less than\n                  the undivided interest set forth in Exhibit \"A\" as NRI of all\n                  indicated hydrocarbons produced, saved and marketed from or\n                  attributable to the Wells, including any non-producing, behind\n                  the pipe, or proved undeveloped reserves, through plugging,\n                  abandonment and salvage of such Wells. Seller's obligation to\n                  bear costs and expenses relating to the development of and\n                  operations on the Wells is not, and, through the plugging,\n                  abandonment and salvage of such Wells, shall not be greater\n                  than the WI set forth in Exhibit \"A.\"\n\n         (p)      Seller is currently receiving from all purchasers of\n                  production from the Mineral Interests at least the NRI set\n                  forth in Exhibit \"A\" without suspense or any indemnity other\n                  than standard division order warranties. Seller is currently\n                  bearing, as Operator, or paying to operators of the Leases,\n                  for the development and operation thereof no more than the WI\n                  set forth in \"Exhibit A,\" and the Seller is current for all\n                  costs and expenses pertinent to the development and operation\n                  of the Leases.\n\n\n\n\n                                     13\n\n   15\n\n\n\n         (q)      No portion of the Mineral Interests (1) has been contributed\n                  to and is currently held by a tax partnership; (2) is subject\n                  to any form of agreement (whether formal or informal, written\n                  or oral) deemed by any state or federal tax statute, rule or\n                  regulation to be or have created a tax partnership; or (3)\n                  otherwise constitutes \"partnership property\" (as that term is\n                  used in Subchapter K of Chapter 1 of Subtitle A of the Code)\n                  of a tax partnership. For the purpose of this Article 4.01(s)\n                  a \"tax partnership\" is an entity deemed to be a partnership\n                  within the meaning of Section 761 of the Internal Revenue Code\n                  or any similar state or federal statute, rule or regulation,\n                  by reason of elections made not to be excluded from the\n                  application of such partnership provisions.\n\n         (r)      The Seller represents that it has been furnished with such\n                  information as Seller may have requested from the Buyer\n                  concerning the Buyer, Harken Energy's common stock and the\n                  Shares being delivered hereunder. The Seller further\n                  represents that (A) it is an \"accredited investor,\" as defined\n                  in Rule 501(a) of the Securities Act of 1933, as amended (the\n                  \"Securities Act\"), and (B) it has had the opportunity to ask\n                  questions of and receive satisfactory answers from management\n                  of Harken Energy concerning Harken Energy, its operations, the\n                  matters set forth in the Harken SEC Documents and an other\n                  matters. The Seller acknowledges and agrees that the Shares\n                  may not be sold or transferred following the Closing unless\n                  either (a) such Shares have been registered under the\n                  Securities Act and applicable state securities laws, or (b)\n                  the transfer is exempt from the registration requirements of\n                  the Securities Act and applicable state securities laws and\n                  Harken Energy shall have been furnished with a written opinion\n                  of legal counsel reasonably satisfactory to Harken Energy to\n                  the effect that such sale or transfer is exempt from the\n                  registration requirements of the Securities Act and applicable\n                  state securities laws; provided, however, that Bargo may\n                  freely sell or transfer all or any number of Shares to SMPL\n                  and SMPL may freely sell or transfer a portion of its Shares\n                  to EnCap Equity 1996 Limited Partnership or Energy Capital\n                  Investment Company PLC (limited partners of SMPL), so long as\n                  all such sale or transfers are accomplished in a manner\n                  consistent with the Securities Act and applicable state\n                  securities laws; provided, however, no legal opinion shall be\n                  required in connection with sales or transfers of Shares to\n                  SMPL or to limited partners of SMPL as provided above. The\n                  Seller agrees that the certificates representing the Shares\n                  issued pursuant to this Agreement will contain the following\n                  restrictive legend: THE SHARES OF STOCK REPRESENTED BY THIS\n                  CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT\n                  OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT AND CANNOT BE\n                  SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS REGISTERED\n                  UNDER SUCH ACTS OR EXEMPTIONS FROM REGISTRATION ARE AVAILABLE.\n                  THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS\n                  RESTRICTED UNDER THE PURCHASE AND SALE AGREEMENT DATED AS OF\n                  MAY 19, 1998, AMONG HARKEN ENERGY CORPORATION, HARKEN\n                  EXPLORATION COMPANY,\n\n\n\n                                     14\n\n   16\n\n\n\n                  ST. MARTINVILLE PARTNERS, LTD. AND BARGO ENERGY COMPANY.  A\n                  COPY OF THE PURCHASE AND SALE AGREEMENT MAY BE OBTAINED\n                  AT NO COST BY WRITTEN REQUEST MADE BY THE RECORD HOLDER OF\n                  THE CERTIFICATE TO HARKEN ENERGY CORPORATION.\n\n         (s)      Seller has provided Buyer with complete and accurate\n                  information relating to the Leases and Assets, including\n                  without limitation, all applicable agreements relating,\n                  appertaining or incidental to the Leases, production history\n                  and characteristics. Seller has also provided Buyer with\n                  copies of all land and well files heretofore maintained and\n                  belonging to Seller.\n\n         (t)      Prior to Closing, Seller shall have made available to Buyer\n                  for examination at Seller's office in Houston, Texas, all\n                  title and other information relating to the Assets insofar as\n                  the same are in Seller's possession and after Closing will\n                  cooperate with Buyer in Buyer's efforts to obtain such\n                  additional information relating to the Assets as Buyer may\n                  reasonably require, to the extent in each case that Seller may\n                  do so without violating legal constraints or any obligation of\n                  confidence or other contractual commitment of Seller to a\n                  third party. After Closing, Seller shall cooperate with Buyer\n                  in Buyer's efforts to obtain, at Buyers' expense, such\n                  additional title information as Buyer may reasonably deem\n                  prudent.\n\n         (u)      Seller has caused the Assets to be produced, operated and\n                  maintained in a good and workmanlike manner consistent with\n                  good oilfield practices, has maintained insurance now in force\n                  with respect to the Assets, has paid or caused to be paid all\n                  costs and expenses in connection therewith, has kept the\n                  Leases in full force and effect and has performed and, to the\n                  best knowledge of Seller, complied with all the covenants and\n                  conditions contained in the Leases and all agreements relating\n                  to the Assets.\n\n         (v)      During the period between the Effective Date and the Closing,\n                  Seller has not entered into any agreements or commitments with\n                  respect to the Assets, has not modified or terminated any of\n                  the agreements relating to the Assets, including, without\n                  limitation, the Basic Documents and the Product Contracts, has\n                  not encumbered, sold or otherwise disposed of any of the\n                  Assets other than personal property which has been replaced by\n                  equivalent property or consumed in the operation of the\n                  Assets, and has not voluntarily compromised any amounts\n                  payable to the Seller due to casualty loss or any pending or\n                  threatened taking related to the Assets.\n\n         (w)      Seller has exercised reasonable efforts in safeguarding and\n                  maintaining all engineering, geological and geophysical data,\n                  reports and maps, contract rights and like information\n                  relating to the Assets.\n\n\n\n\n                                     15\n\n   17\n\n\n\n         (x)      In the event that as of the Closing Date the Assets are\n                  subject to outstanding Governmental Approvals, Seller agrees\n                  to indemnify the Buyer Indemnified Party against any Loss or\n                  Losses arising by reason of the failure to obtain such\n                  Governmental Approvals. Seller represents that it will\n                  exercise reasonable efforts to obtain such Governmental\n                  Approvals. The indemnity herein provided shall survive the\n                  Closing until the required Governmental Approvals have been\n                  obtained.\n\n         (y)      Seller has permitted Buyers' authorized representatives to (i)\n                  consult with Seller's and\/or any third-party contract\n                  operator's agents and employees during reasonable business\n                  hours and to conduct on-site inspections, reasonable tests and\n                  inventories with respect to the Assets and inspect and examine\n                  all production and related data, well logs and geological and\n                  geophysical data relating to the Assets, and (ii) inspect and\n                  make copies of all orders, proceedings and evidence with\n                  respect to the Assets of the Louisiana Conservation\n                  Commission.\n\n         (z)      Prior to the Closing Date, Seller has used reasonable efforts\n                  to maintain its relationships with all suppliers, customers\n                  and others having business relationships with Seller with\n                  respect to the Assets so that such relationships will be\n                  preserved for Buyer on and after the Closing Date.\n\n         (aa)     All Wells, whether producing or not, located on the Lands,\n                  other than Wells which have been previously plugged and\n                  abandoned in compliance with applicable rules and regulations,\n                  are set forth in Exhibit \"A\" hereto.\n\n         (bb)     There are no underground storage tanks located on any of \n                  Lands.\n\n         (cc)     Since the Effective Date, Seller has purchased new Leases for\n                  the St. Martinville Prospect Area, S. Bayou Boeuf Prospect\n                  Area and Bol Mex Prospect Area as set forth on Exhibits \"A-1\",\n                  \"A-2\" and \"A-3\", respectively, under the heading \"Post\n                  Effective Date Leases.\" Seller paid the bonus amount set forth\n                  in the description of such Post Effective Date leases on such\n                  Exhibits.\n\n         (dd)     Exhibit \"I\" sets forth each \"authority for expenditure\" issued\n                  or received by Seller since the Effective Date along with an\n                  indication of the Prospect Area which the authorization\n                  relates to, the amount of the authorization and specifically\n                  states whether Seller has approved that authorization.\n\n         4.02 Representations and Warranties of Buyer. Each of Harken Energy and\nExploration jointly and severally represents and warrants to Seller that the\nstatements contained in this Article 4.02 are true and correct as of the Closing\nDate:\n\n\n\n\n                                     16\n\n   18\n\n\n\n         (a)      Each of Harken Energy and Exploration is a corporation duly\n                  organized, validly existing and in good standing under the\n                  laws of the State of Delaware, and is duly qualified to do\n                  business and in good standing in the State of Texas.\n\n         (b)      Each Buyer has all requisite power and authority, corporate\n                  and otherwise, to carry on its business as presently\n                  conducted, to enter into this Agreement and Related Agreements\n                  to which it is a party, and to perform its obligations under\n                  this Agreement and such Related Agreements.\n\n         (c)      The execution and delivery of this Agreement and the Related\n                  Agreements have been, and the execution and delivery of all\n                  certificates, documents and instruments required to be\n                  executed and delivered by each Buyer at Closing, and the\n                  consummation of the transactions contemplated hereby as of\n                  the Closing Date shall have been duly authorized by all\n                  necessary corporate action on the part of each Buyer and no\n                  further authorization is required by any law, statute,\n                  regulation, court order or judgment applicable to either\n                  Buyer. This Agreement constitutes a legal, valid and binding\n                  obligation of each Buyer enforceable in accordance with its\n                  terms, subject however, to the effects of bankruptcy,\n                  insolvency, reorganization, moratorium and similar laws, as\n                  well as to principles of equity (regardless of whether such\n                  enforceability is considered in a proceeding in equity or at\n                  law).\n\n         (d)      The execution and delivery of the Agreement and the\n                  consummation of the transactions contemplated hereby will not\n                  (i) violate, or be in conflict with any provisions of either\n                  Buyer's certificate of incorporation, bylaws or governing\n                  documents, (ii) constitute a material breach of, or any event\n                  of default under, any contract or agreement to which either\n                  Buyer is a party or by which it or its assets are bound, or\n                  constitute the happening of an event or condition upon which\n                  any other party to such a contract or agreement may exercise\n                  any right or option which will materially adversely affect the\n                  ability of either Buyer to perform its obligations hereunder,\n                  or (iii) violate any judgment, decree, order, statute, rule or\n                  regulation applicable to either Buyer.\n\n         (e)      No suit, action or other proceeding is pending before any\n                  court or governmental agency as of the date of this Agreement\n                  to which either Buyer is a party and which might materially\n                  hinder or impede the ability of either Buyer to perform its\n                  obligations hereunder. Harken Energy shall promptly notify\n                  Seller of any such proceeding arising prior to the Closing\n                  with respect to which its receives actual notice.\n\n         (f)      Neither Buyer has incurred any liability, contingent or\n                  otherwise, for brokers' or finders' fees relating to the\n                  transactions contemplated by this Agreement for which Seller\n                  shall have any responsibility whatsoever.\n\n\n\n\n                                     17\n\n   19\n\n\n\n         (g)      Harken Energy is current with respect to all required reports,\n                  schedules, forms, statements and other documents with the\n                  Commission. The consolidated financial statements of Harken\n                  Energy filed with the Commission for the year ended December\n                  31, 1997, comply as to form in all material respects with\n                  applicable accounting requirements and the published rules and\n                  regulations of the SEC with respect thereto, have been\n                  prepared in accordance with generally accepted accounting\n                  principles (except, in the case of unaudited statements, as\n                  permitted by Form 10-Q of the SEC) applied on a consistent\n                  basis during the periods involved (except as may be indicated\n                  in the notes thereto) and fairly present the consolidated\n                  financial position of Harken Energy and its consolidated\n                  subsidiaries as of the dates thereof and the consolidated\n                  results of their operations and cash flows for the periods\n                  then ended (subject, in the case of unaudited statements, to\n                  normal year-end audit adjustments and other adjustments\n                  described therein).\n\n         (h)      The Closing Shares to be received by Seller (i) have been duly\n                  authorized, and (ii) at the time of their issuance, will be\n                  validly issued, fully paid, nonassessable, and not issued in\n                  violation of any preemptive rights or any applicable laws,\n                  rules or regulations. Such Shares will, upon delivery thereof,\n                  be free and clear of all liens, charges, pledges,\n                  encumbrances, equities and claims whatsoever other than those\n                  created by Seller.\n\n         (i)      The Reserve Shares and Additional Shares which may be received\n                  by Seller will when so issued and received (i) have been duly\n                  authorized, and (ii) at the time of their issuance, will be\n                  validly issued, fully paid, nonassessable, and not issued in\n                  violation of any preemptive rights or any applicable laws,\n                  rules or regulations. Such shares will, upon delivery thereof,\n                  be free and clear of all liens, charges, pledges,\n                  encumbrances, equities and claims whatsoever other than those\n                  created by Seller.\n\n         (j)      Set forth on Exhibit \"4.02(j)\" attached hereto and made a part\n                  hereof for all purposes is the authorized capitalization of\n                  Harken Energy and Exploration and the number of shares of\n                  their respective capital stock (or other equity interests)\n                  issued and outstanding as of the date hereof.\n\n\n                                    ARTICLE 5\n                  ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES\n\n         5.01 Definitions. As used in this Article 5.01:\n\n                  (a)      \"Contaminated Site List\" means any list, registry, or\n                           other compilation established by any Governmental\n                           Entity of sites that require or potentially require\n                           investigation, removal actions, remedial actions, or\n                           any other response under any Environmental Laws or\n                           treaty covering environmental\n\n\n\n                                     18\n\n   20\n\n\n\n                           matters, as the result of the Release or threatened \n                           Release of any Hazardous\n                           Materials.\n\n                  (b)      \"Environmental Laws\" means all laws, rules,\n                           regulations, statutes, ordinances or orders of any\n                           Governmental Entity relating to (A) the control of\n                           any potential pollutant or protection of the air,\n                           water or land, (B) solid, gaseous or liquid waste\n                           generation, handling, treatment, storage, disposal or\n                           transportation, and (C) exposure to hazardous, toxic\n                           or other substances alleged to be harmful, and\n                           includes without limitation, the terms and conditions\n                           of any license, permit, approval, or other\n                           authorization by any Governmental Entity, and\n                           judicial, administrative, or other regulatory\n                           decrees, judgments, and orders of any Governmental\n                           Entity. The term \"Environmental Laws\" shall include,\n                           but not be limited to, the Clean Air Act, 42\n                           U.S.C.ss.7401 et seq., the Clean Water Act, 33\n                           U.S.C.ss.1251 et seq., the Resource Conservation\n                           Recovery Act (\"RCRA\"), 42 U.S.C.ss.6901 et seq., the\n                           Superfund Amendments and Reauthorization Act, 42\n                           U.S.C.ss.11011 et seq., the Toxic Substances Control\n                           Act, 15 U.S.C.ss.2601 et seq., the Water Pollution\n                           Control Act, 33 U.S.C.ss.1251, et seq., the Safe\n                           Drinking Water Act, 42 U.S.C.ss.300f et seq., the\n                           Comprehensive Environment Response, Compensation, and\n                           Liability Act (\"CERCLA\"), 42 U.S.C.ss.9601 et seq.,\n                           the Oil Pollution Act of 1990, 33 U.S.C.A.ss.2701 et\n                           seq.; the Louisiana Environmental Quality Act, La.\n                           R.S. 30:2001 et seq.; the Louisiana Conservation Act,\n                           La. R.S. 30:1 et seq.; the Louisiana Oilfield Site\n                           Restoration Law, La. R.S. 30:80 et seq.; the\n                           Louisiana Coastal Zone Management Program, La. R.S.\n                           49:214.21 et seq.; the Louisiana-Coastal Wetlands\n                           Conservation and Restoration Act, La. R.S. 49:214.1\n                           et seq.\n\n                  (c)      \"Environmental Liabilities\" shall mean any and all\n                           liabilities, responsibilities, claims, suits, losses,\n                           costs (including remediation, removal, response,\n                           abatement, cleanup, investigative, and\/or monitoring\n                           costs and any other related costs and expenses),\n                           damages, settlements, expenses, charges, assessments,\n                           liens, penalties, fines, prejudgment and postjudgment\n                           interest, attorney fees and other legal fees (A)\n                           pursuant to any agreement, order, notice, or\n                           responsibility, (including directives embodied in\n                           Environmental Laws), injunction, judgment, or similar\n                           documents (including settlements), or (B) pursuant to\n                           any claim by a Governmental Entity or other person\n                           for personal injury, property damage, damage to\n                           natural resources, remediation, or similar costs or\n                           expenses incurred by such Governmental Entity or\n                           person pursuant to common law, statute, rule or\n                           regulation.\n\n                  (d)      \"Environmental Remediation Costs\" means all costs and\n                           expenses of actions or activities to (A) cleanup or\n                           remove Hazardous Materials from the environment, (B)\n                           to prevent or minimize the further movement, leaching\n                           or\n\n\n\n                                     19\n\n   21\n\n\n\n                           migration of Hazardous Materials in the environment,\n                           (C) prevent, minimize or mitigate the Release or\n                           threatened Release of Hazardous Materials into the\n                           environment, or injury or damage from such Release,\n                           and (D) comply with the requirements of any\n                           Environmental Laws. Environmental Remediation Costs\n                           include, without limitation, costs and expenses\n                           payable in connection with the foregoing for legal,\n                           engineering or other consultant services, for\n                           investigation, testing, sampling, and monitoring, for\n                           boring, excavation, and construction, for removal,\n                           modification or replacement of equipment or\n                           facilities, for labor and material, and for proper\n                           storage, treatment, and disposal of Hazardous\n                           Materials.\n\n                  (e)      \"Governmental Entity\" means any court, administrative\n                           agency or commission or other governmental authority\n                           or agency, domestic or foreign, including local\n                           authorities.\n\n                  (f)      \"Hazardous Materials\" means any toxic or hazardous\n                           materials or substances, or solid wastes, including\n                           asbestos, buried contaminants, chemicals, flammable\n                           or explosive. materials, radioactive, materials,\n                           petroleum and petroleum products, and any other\n                           chemical, pollutant, contaminants substance or waste\n                           that is regulated by any Governmental Entity under\n                           any Environmental Law.\n\n                  (g)      \"Material\" or \"Material Adverse Effect\" for purposes\n                           of this Article 5.01 means any matter, response,\n                           action, remediation, or other item calling for the\n                           payment or expenditure by any Seller or Buyer after\n                           the Closing of funds in excess of $50,000 per\n                           occurrence, or $500,000 in the aggregate.\n\n                  (h)      \"Release\" means any spilling, leaking, pumping,\n                           pouring, emitting, emptying, discharging, injecting,\n                           escaping, leaching, dumping, or disposing into the\n                           environment of any Hazardous Materials.\n\n         5.02 Representations and Warranties. With respect to the Assets, the\nSeller represents and warrants to Buyer that, to the best of its knowledge:\n\n         (a)      With respect to permits and licenses relating to the Assets,\n                  (A) all Material licenses, permits, consents, or other\n                  approvals required under Environmental Laws that are necessary\n                  to the operations the Assets have been obtained and are in\n                  full force and effect, and Seller is unaware of any basis for\n                  revocation or suspension of any such licenses, permits,\n                  consents or other approvals, (B) no declaration, environmental\n                  impact statement, or other filing or notice to any\n                  Governmental Entity is required under Environmental Laws as a\n                  condition or in connection with the transactions contemplated\n                  by this Agreement, and (C) no Environmental Laws impose any\n                  obligation upon any Seller, as a result of any transaction\n                  contemplated hereby,\n\n\n\n                                     20\n\n   22\n\n\n\n                  requiring prior notification to any Governmental Entity of the\n                  transfer of any permit, license, consent, or other approval\n                  which materially is necessary to the operations of the Assets.\n\n         (b)      No Governmental Entity has given notice to the Seller of any\n                  claim or investigation under or violation of any Environmental\n                  Law with respect to the Assets or of any intent to encumber or\n                  place a lien under any Environmental Laws upon the Assets. No\n                  Material notice or Material restriction has been, or is\n                  required to be placed in any deed or other public real\n                  property record pursuant to any Environmental Laws with\n                  respect to the Assets.\n\n         (c)      Except as would not have a Material Adverse Effect and with\n                  respect to the Assets or any of the Lands, (A) no oral or\n                  written notification of any Release of any Hazardous Materials\n                  has been given to any Governmental Entity by or on behalf of\n                  Seller, (B) none of the Assets is on (nor has any Seller\n                  received any notice from any Governmental Entity that any of\n                  the Assets is being considered or proposed for listing on) any\n                  Contaminated Site List, (C) none of the Assets is the subject\n                  of any judgment, decree or order of any Governmental Entity\n                  requiring any investigation, removal, remediation or similar\n                  action, or other response under any Environmental Laws, (D)\n                  the Seller has not received any notice from any Governmental\n                  Entity that it is liable or responsible, or potentially liable\n                  or responsible, in any material respect for any removal,\n                  remedial, or other similar type action under any Environmental\n                  Laws as the result of the Release or threatened Release of\n                  Hazardous Materials with respect to the Assets and (E) there\n                  is no claim, complaint, investigation, litigation, or\n                  administrative proceeding threatened before any Governmental\n                  Entity (and to the best of its information and belief, Seller\n                  knows of no threatened claim, complaint, investigation,\n                  litigation, or administrative proceeding) in which it is\n                  asserted by any Governmental Entity or any other person that\n                  Seller (x) has violated or is not in compliance with any\n                  Environmental Laws with respect to the Assets, (y) is liable\n                  for or should be ordered or compelled to undertake any\n                  removal, remediation, or other response action as the result\n                  of the Release or threatened Release of any Hazardous\n                  Materials with respect to the Assets or (z) is liable for\n                  damages (including without limitation, damages to natural\n                  resources), fines, penalties, or other relief as the result of\n                  the violation or noncompliance of any Environmental Laws or as\n                  the result of the Release or threatened Release of any\n                  Hazardous Materials with respect to the Assets.\n\n\n         (d)      Except where the failure to have such permits and\n                  authorizations would not have a Material Adverse Effect, all\n                  Hazardous Materials, garbage, refuse, and similar waste\n                  materials with respect to the Assets have been transported by\n                  Seller only to sites which have proper permits or other\n                  authorization from Governmental Entities for the disposal of\n                  such materials. To the best knowledge of Seller, no such site\n                  to which\n\n\n\n                                     21\n\n   23\n\n\n\n                  Hazardous Materials, garbage, refuse, or similar waste\n                  materials have been transported for disposal Seller are on any\n                  Contaminated Site List.\n\n         (e)      Except as would not have a Material Adverse Effect, all\n                  operations of Seller with respect to the Assets are in\n                  compliance with all Environmental Laws.\n\n         (f)      Except as would not have a Material Adverse Effect, no facts\n                  or circumstances exist which could reasonably be expected to\n                  result in any Environmental Liabilities to Seller or the Buyer\n                  following the Closing with respect to the Assets.\n\n         (g)      Seller does not now own, lease or otherwise operate any\n                  disposal sites on the Assets, other than the saltwater\n                  disposal wells which are listed on Exhibit \"A\", for which the\n                  Seller has obtained necessary permits from any Governmental\n                  Entity and which wells are in material compliance with all\n                  Environmental Laws and other applicable laws and regulations.\n\n\n                                    ARTICLE 6\n                             ENVIRONMENTAL COVENANT\n\n         6.01 Availability of Data to Buyer; Phase I Environmental Audit. Prior\nto the date hereof, Seller has made available to Buyer information which is in\nthe possession or control of Seller or to which Seller has access (other than\npublicly available information to which Buyer has equal access) and which\nrelates to the environmental condition of the Assets, which information\nincludes, without limitation, information regarding crude oil and produced water\nthat may have been spilled or disposed of on-site and the locations thereof;\nonsite pits and pit closures; on-site burial; land farming; land spreading;\nunderground injection; and on-site solid waste disposal sites. Seller has\nfurther delivered to Buyer true and correct copies of its Phase 1 Environmental\nReport for the St. Martinville Prospect Area dated February 10, 1997 and its\nPhase 1 Environmental Report for the S. Bayou Boeuf Prospect Area dated\nDecember, 1997. No material environmental events have occurred since the dates\nof these reports.\n\n         6.02 Environmental Assessment. Buyer shall have the right to make an\nenvironmental assessment of the Assets during the period beginning on the date\nof execution of this Agreement and ending ninety (90) days after the Closing\nDate (\"Examination Period\"). If during the Examination Period, Buyer determines\nthat operations of Seller or its affiliates with respect to the Assets are not\nin compliance with all Environmental Laws, without regard to whether Seller has\nbeen previously notified of such matter by an applicable authority, then Buyer\nshall give Seller notice thereof together with an explanation of the\nenvironmental problem. Seller shall have five (5) days following such notice to\nnotify Buyer whether Seller elects to (x) remediate, dispose of, restore, or\notherwise resolve such environmental problem or lack of compliance in accordance\nwith all applicable laws, rules, and regulations, and to Buyer's reasonable\nsatisfaction, or (y) reduce the consideration to be paid under\n\n\n\n                                     22\n\n   24\n\n\n\nArticle 8.03 (b) by $750,000.00. Buyer and Seller agree to cooperate with each\nother in connection with all activities to be conducted hereunder.\n\n\n                                    ARTICLE 7\n                          SURVIVAL AND INDEMNIFICATION\n\n         7.01 Survival of Representations and Warranties. The representations\nand warranties of (i) the Seller contained in Article 4.01 and Article 5 hereof\nshall survive the Closing for a period of one year from the Closing Date and\n(ii) the representations and warranties of the Buyer contained in Article 4.02\nhereof shall survive the Closing for one year from the Closing Date (the\n\"Survival Period\").\n\n         7.02 Indemnification Provision for the Benefit of the Seller. In the\nevent the Buyer breaches any of its representations and warranties contained in\nArticle 4.02 hereof, then the Buyer agrees to indemnify and hold harmless the\nSeller, any current, former, and future director, officer, manager, member,\npartner, shareholder, employee and agent of Seller, and any successor, assign,\nheir, and executor of any of the foregoing (the \"Seller Indemnified Party\"),\nfrom and against the entirety of any Losses resulting from or related or\nattributable to the breach which the Seller, or any such Affiliate (or any such\nother indemnified person in such person's capacity set forth above) shall\nsuffer, provided such claim for indemnification is brought within the Survival\nPeriod; and further provided that \"Losses\", as used in this sentence, shall not\ninclude, and Buyer shall not be responsible or liable for, any death, personal\ninjury, or consequential damages in respect of such breach. Further, subject to\nthe limitations of the immediately preceding sentence, the Buyer indemnifies,\ndefends and holds the Seller Indemnified Parties harmless from and against any\nand all Losses directly or indirectly arising out of or resulting from any\nHazardous Materials being present or released in, on or around any part of the\nsurface of the Fee Tract, or in the soil, groundwater or soil vapor on or under\nthe surface of the Fee Tract subsequent to the Closing Date that is caused by\nthe Buyer or its agents and employees.\n\n         7.03 Indemnification Provision for the Benefit of the Buyer In the\nevent the Seller breaches any of its representations and warranties contained in\nArticle 4.01 and Article 5 hereof, then the Seller agrees to indemnify and hold\nharmless the Buyer, any current, former, and future director, officer, manager,\nmember, partner, shareholder, employee and agent of Buyer, and any successor,\nassign, heir, and executor of any of the foregoing (the \"Buyer Indemnified\nParty\"), from and against the entirety of any Losses resulting from or related\nor attributable to the breach which the Buyer, or any such Affiliate (or any\nsuch other indemnified person in such person's capacity set forth above) shall\nsuffer, provided such claim for indemnification is brought within the Survival\nPeriod; and further provided that \"Losses\", as used in this sentence, shall not\ninclude, and Seller shall not be responsible or liable for, any death, personal\ninjury, or consequential damages in respect of such breach. Further, subject to\nthe limitations of the immediately preceding sentence, the Seller\n\n\n\n                                     23\n\n   25\n\n\n\nindemnifies, defends and holds the Buyer Indemnified Parties harmless from and\nagainst any and all Losses directly or indirectly arising out of or resulting\nfrom any Hazardous Materials being present or released in, on or around any part\nof the surface of the Fee Tract, or in the soil, groundwater or soil vapor on or\nunder the surface of the Fee Tract prior to the Closing date and thereafter,\nexcept for the presence of such Hazardous Materials that is caused by the Buyer\nor its agents and employees.\n\n         7.04     Matters Involving Third Parties.\n\n         (a)      If any third party shall notify a Seller Indemnified or Buyer\n                  Indemnified Party with respect to any matter which may give\n                  rise to a claim for indemnification against Seller or Buyer,\n                  as the case may be (the \"Indemnifying Party\") under this\n                  Article 7 or otherwise pursuant to this Agreement, then the\n                  Indemnified Party shall promptly (and in any event within ten\n                  (10) business days after receiving service of process in a\n                  lawsuit, administrative proceeding or arbitration proceeding\n                  with respect to the Third Party Claim) notify each\n                  Indemnifying Party thereof in writing. Each of the matters\n                  described in this Article 7.04(a) shall be referred to in this\n                  Agreement as a \"Third Party Claim\".\n\n         (b)      Any Indemnifying Party will have the right to assume and\n                  thereafter conduct the defense of the Third Party Claim with\n                  counsel of its choice reasonably satisfactory to the\n                  Indemnified Party; provided, however, that the Indemnifying\n                  Party will not consent to the entry of any judgment or enter\n                  into any settlement with respect to the Third Party Claim\n                  without the prior written consent of the Indemnified Party\n                  (not to be withheld unreasonably) unless the judgment or\n                  proposed settlement involves only the payment of money damages\n                  and does not impose an injunction or other equitable relief\n                  upon (or constitute an admission of guilt, liability, fault or\n                  responsibility for) the Indemnified Party. The Indemnified\n                  Party shall have the right to employ separate counsel in any\n                  such action and to participate in the defense thereof, but the\n                  fees and expenses of such counsel shall be at the expense of\n                  the Indemnified Party unless (i) the employment thereof has\n                  been specifically authorized in writing by the Indemnifying\n                  Party or (ii) the Indemnifying Party failed to assume the\n                  defense and employ counsel.\n\n         (c)      Unless and until an Indemnifying Party assumes the defense of\n                  the Third Party Claim as provided in Article 7.04(b) above,\n                  however, the Indemnified Party may defend against the Third\n                  Party Claim in any manner it reasonably may deem appropriate\n                  with such reasonable costs and expenses associated therewith\n                  to be borne for the account of the Indemnifying Party.\n\n         (d)      In no event will the Indemnified Party consent to the entry of\n                  any judgment or enter into any settlement with respect to the\n                  Third Party Claim without the prior written consent of the\n                  Indemnifying Party (not to be withheld unreasonably), unless\n                  the\n\n\n\n                                     24\n\n   26\n\n\n\n                  Indemnified Party waives indemnification with respect to the\n                  Third Party Claim so settled and adjudicated.\n\n         (e)      The indemnification obligations of Seller and Buyer,\n                  respectively under this Agreement shall include court costs\n                  and attorney's fees and expenses and costs of investigating,\n                  preparing or defending any action or proceeding with respect\n                  to any Third Party Claim.\n\n\n                                    ARTICLE 8\n                             POST CLOSING COVENANTS\n\n         8.01 Certain Obligations of Seller. Seller agrees that, with respect to\nthe period following the Closing:\n\n         (a)      RECORDS. On or before five (5) business days after Closing,\n                  Seller shall, at Seller's cost, deliver to Buyer, at Buyer's\n                  offices in Irving, Texas, copies of all Records.\n\n         (b)      SUSPENSE FUNDS. As soon as practicable after Closing, Seller\n                  shall provide Buyer with a list showing all proceeds from\n                  production attributable to the Assets which are currently held\n                  in suspense. Seller shall remain responsible for distribution\n                  of such proceeds to the parties lawfully entitled thereto, and\n                  agrees to indemnify, defend and hold harmless Buyer from and\n                  against any and all Losses arising out of or relating to such\n                  proceeds.\n\n         (c)      RETAINED LIABILITIES. Seller retains and shall remain liable\n                  and responsible for, and Buyer specifically does not assume,\n                  any liabilities and obligations of Seller not related to or\n                  arising out of the ownership, use, maintenance and operation\n                  of the Assets, whether known or unknown, accrued or contingent\n                  and not otherwise specifically set forth in this Agreement.\n\n         (d)      BOL MEX PROSPECT. The Seller will continue its best efforts to\n                  bring partners in on a promoted basis to drill the Bol Mex\n                  Prospect Area and the depths below the base of the Discorbis 4\n                  Sand in the St. Martinville Prospect Area. Buyer will have the\n                  right to participate in any well drilled to the Discorbis 4\n                  Sand or below for its interest or to participate with Seller\n                  in the promote, including cash, carried interest on other\n                  value, consideration or interest to be received in any such\n                  transaction by Seller.\n\n         8.02 Certain Obligations of Buyer. Each Buyer agrees that within (30)\ndays following Closing, Buyer shall record those Conveyance Documents necessary\nto evidence in the public record that Buyer has acquired the Assets and within a\nreasonable time thereafter, Buyer shall supply Seller with a true and accurate\nphotocopy of the recorded and filed Conveyance Documents. In the event Buyer\nfails to record any such Conveyance Document within such time period, Seller\nmay, but shall\n\n\n\n                                     25\n\n   27\n\n\n\nnot be obligated to, record such Conveyance Document on Buyer's behalf and at\nBuyer's cost (for which Buyer will promptly reimburse Seller upon demand).\n\n\n         8.03     Agreements Regarding the Issuance of Closing Shares or Cash\n\n         (a)      CLOSING SHARES. Harken will issue and deliver to the Seller,\n                  within thirty (30) days of the Closing Date, the Closing\n                  Shares equal in value to Sixteen Million Two Hundred Fifty\n                  Thousand Dollars ($16,250,000), which number of Closing Shares\n                  will be determined by dividing such value by the Average\n                  Closing Price of the Shares for the thirty (30) consecutive\n                  calendar days immediately preceding the Closing Date.\n\n         (b)      RESERVE SHARES. Exhibit 8.03(b) attached hereto contains a \n                  list of Leases (the \"Expiring Leases\") covering depths above\n                  the base of the Discorbis 4 Sand in the St. Martinville\n                  Prospect Area, the primary terms of which have or will expire\n                  on or before December 31, 1998. At any time, and from time to\n                  time, from and after forty- five (45) days following the\n                  Closing Date until the close of business one hundred twenty\n                  (120) days following the Closing Date (or if such day is not\n                  a business day, the next following business day) Seller may\n                  notify Buyer that Seller has acquired new or renewal leases\n                  covering all or portions of the lands and depths covered by\n                  the Expiring Leases, providing for at least a three-year\n                  primary term and landowners' royalty interests comparable to\n                  those contained in the Expiring Leases. Such notice shall\n                  include (i) Seller's proposed form of assignment of such new\n                  or renewal leases to Harken Exploration, such assignment to\n                  be substantially in the form attached as Exhibit \"B\" hereto,\n                  (ii) a statement of how many net mineral acres are covered by\n                  each lease, and (iii) the abstracts, title opinions or\n                  whatever other title information Seller used in determining\n                  what interests are leased and the net mineral acres covered\n                  by each lease. Buyer shall have a period of not more than\n                  forty-five (45) days following notice and tender in which to\n                  notify Seller of Buyer's approval of title to the new or\n                  renewal leases or to make objections to title with regard to\n                  all or any part of the renewal leases included in the subject\n                  notice (the date of such notice or, if no notice is given,\n                  the date of the expiration of such forty-five-day period, is\n                  herein called the \"Approval Date\"). In the absence of timely\n                  notice, Buyer will be deemed to have approved title to all of\n                  the new or renewal leases. Those leases subject to Buyer's\n                  good faith title objections shall be excluded from the\n                  assignment. Upon tender of the assignment by Seller at any\n                  time subsequent to the Approval Date, Harken Energy will, at\n                  its option, either: (i) tender cash to Seller in the amount\n                  of the Remaining Purchase Price, subject to adjustment as set\n                  forth below; or (ii) deliver to Seller Reserve Shares equal\n                  in value to the Remaining Purchase Price, subject to\n                  adjustment as set forth below. The number of Reserve Shares\n                  to be delivered will be determined by dividing the Remaining\n                  Purchase Price, as adjusted, by the Average \n        \n\n\n                                     26\n\n   28\n\n\n                  Closing Price. In the event the new or renewal leases to be\n                  assigned by Seller cover less than the number of net mineral\n                  acres set forth on Exhibit 8.03(b) attached hereto, the\n                  Remaining Purchase Price payable after the deduction, if any,\n                  required for environmental compliance under Article 6.02,\n                  shall be reduced in the proportion that the number of net\n                  mineral acres covered by the new or renewal leases bears to\n                  the number of net mineral acres set forth on Exhibit 8.03(b).\n        \n         (c)      As used in this Agreement:\n\n                  \"Approval Date\" has the meaning set forth in Article 8.03(b).\n\n                  \"Average Closing Price\" means, when used in Article 8.03(a),\n                  the average of the last reported Sales Price for the Shares\n                  for the 30 consecutive calendar days immediately preceding the\n                  Closing Date, when used in Article 8.03(b) means the average\n                  of the last reported Sales Price for the Shares for the 30\n                  consecutive calendar days immediately preceding the Approval\n                  Date.\n\n                  \"Sales Price\" means, when used with respect to a calendar day,\n                  (i) the last reported sales price of the Shares on such day on\n                  the exchange where the Shares are primarily traded, (ii) if\n                  the Shares are not traded on an exchange, the last reported\n                  sale price of the Shares on such day on the NASDAQ National\n                  Market System, or (iii) if the Shares are not reported on the\n                  NASDAQ National Market System, the closing bid price for the\n                  Shares last quoted on such day as reported by an established\n                  quotation service for over-the-counter securities.\n\n         8.04 Agreement In Regard to an Easement. The Seller is not selling the\nsurface with respect to the Assets in the St. Martinville Area. However, the\nSeller and the Buyer agree to enter into an Easement Agreement substantially in\nthe form of Exhibit \"G\" attached hereto in regard to the use by the Buyer of\nsuch surface for its operations. Such Agreement shall comply with Louisiana law\nand will include the granting of the following rights: (i) the right of ingress\nand egress to and from the Assets over and across all present, future and\ndesignated roads and highways situated on the Lands, this right of ingress and\negress being for persons, vehicles, and equipment necessary or convenient for\nuse in the Buyers' exercise of their rights to explore for, produce, maintain ,\nsell, and transport oil and gas in the Assets; the right to install, maintain,\nand use gates in any fences, which now or will cross any easement tracts; the\nright to mark the location of any easement tracts by suitable markers set in the\nground, provided, however, these markers may be placed in fences or other\nlocations that will not interfere with any reasonable use of the Seller may make\nof the easements; and the right to cut and trim trees and shrubbery that may\nencroach on any easement area.\n\n         8.05 Agreement Concerning Prescriptive Rights. Sellers agree to execute\nthe form of Act of Acknowledgment of Mineral Servitude for Purpose of\nInterruption of Liberative Prescription attached hereto as Exhibit \"L\" upon the\nrequest of Buyer, or Buyer's successors, not more frequently than annually,\nacknowledging the interruption of liberative prescription on the Fee Tract. Any\nsale \n\n\n                                     27\n\n   29\n\n\nor other disposition of Seller's interest in such surface rights shall be made\nexpressly subject to the covenant to execute future acts on the form attached\nas Exhibit \"L\". In the event that any portion of the mineral servitude estate\nunder the Fee Tract shall revert to ownership of the surface holder, then\nSeller covenants for itself, its heirs and assigns forever to reconvey all such\nminerals that may have so reverted to Harken Energy or its nominee. If the\npreceding provisions of this Article 8.05 are not effective or are held to be\ninvalid or unenforceable as against public policy, then Seller shall be deemed\nto have leased all of the minerals under the Fee Tract to Buyer for a term of\n99 years without any royalties, or rental or other consideration deemed payable\nother than the Purchase Price.\n        \n\n                                    ARTICLE 9\n                                EFFECT OF CLOSING\n\n         The following terms, provisions and prorations shall be effective at\nthe Closing:\n\n         (a)      REVENUES. All proceeds from production, accounts receivables,\n                  notes receivable, income, revenues, monies and other items\n                  attributable to the Assets with respect to any period of time\n                  prior to the Effective Date shall belong to and be retained by\n                  or paid over to Seller and all necessary reports with respect\n                  to such proceeds shall be filed by Seller. All proceeds from\n                  production, accounts receivables, notes receivables, income,\n                  revenues, monies and other items attributable to the Assets\n                  with respect to any period of time from and after the\n                  Effective Date shall belong to and be retained by or paid over\n                  to Buyer, except for Hydrocarbons that, at the Effective Date,\n                  are attributable to the Assets and are in storage or are\n                  otherwise held in inventory and all proceeds attributable\n                  thereto.\n\n         (b)      EXPENSES. All accounts payable and accrued liabilities for\n                  costs and expenses attributable to the Assets with respect to\n                  any period of time prior to the Effective Date, including\n                  excise, severance, and similar taxes based on production or\n                  royalties, shall be the obligation of and paid by the Seller,\n                  and all necessary reports with respect to such costs and\n                  expenses shall be filed by Seller. All accounts payable and\n                  accrued liabilities for direct costs and expenses attributable\n                  to the Assets (but not including Seller's overhead costs) with\n                  respect to any period of time from and after the Effective\n                  Date shall be the obligation of and be paid by the Buyer.\n\n         (c)      AD VALOREM AND PROPERTY TAXES. All ad valorem taxes, real\n                  property taxes, personal property taxes and similar\n                  obligations (the \"Taxes\") shall be apportioned as of the\n                  Effective Date between Buyer and Seller. All such Taxes\n                  allocable to periods prior to the Effective Date shall be paid\n                  by Seller, and all such Taxes allocable to the Effective Date\n                  and after shall be paid by Buyer. Any refunds of Taxes\n                  allocable to periods prior to the Effective Date shall be the\n                  property of Seller. Any refunds of Taxes allocable to periods\n                  after the Effective Date shall be the property of Buyer. Buyer\n                  shall file or cause to be filed all required reports and\n                  returns incident to such \n\n\n\n                                     28\n\n   30\n\n\n\n                  Taxes which are due on or after the Effective Date, and shall\n                  pay or cause to be paid to the taxing authorities all such\n                  Taxes reflected on such reports and returns; provided,\n                  however, Seller shall promptly reimburse Buyer for any\n                  amounts owing by Seller with respect thereto pursuant to this\n                  paragraph.\n        \n         (d)      SALES TAXES, FILING FEES, ETC. Buyer shall be liable for any\n                  sales taxes or other transfer taxes, as well as any applicable\n                  conveyance, transfer and recording fees, and real estate,\n                  transfer, stamp or other taxes imposed upon the sale of the\n                  Assets. Seller agrees to use its reasonable best efforts to\n                  assist Buyer in obtaining any applicable exemptions to any\n                  applicable state sales tax. If Seller is required by\n                  applicable state law to report and pay these taxes or fees,\n                  Buyer shall promptly deliver a check to Seller in full\n                  payment, and Seller shall deliver said check to the\n                  appropriate taxing authorities and shall bear any and all\n                  penalties, costs and expenses associated with the failure of\n                  Seller to deliver said check.\n\n         (e)      OTHER TAXES. All production, severance or excise taxes,\n                  conservation fees and other similar such taxes or fees (other\n                  than income taxes) relating to production attributable to the\n                  Assets prior to the Effective Date shall be paid by Seller and\n                  all such taxes and fees relating to such production\n                  attributable to the Assets on and after the Effective Date\n                  shall be paid by Buyer.\n\n         (f)      GAS IMBALANCES. Buyer has not included in its engineering\n                  pertaining to the Assets the effect of any Imbalances (as\n                  hereinafter defined) with respect to shares of production\n                  taken or marketed from or attributable to working interests\n                  comprising the Assets. Attached hereto as Exhibit 9(f) and\n                  made a part hereof for all purposes is a listing of all\n                  Imbalances (including working interest imbalances and pipeline\n                  imbalances) affecting the Assets as of the Effective Date. For\n                  purposes of this Agreement, \"Imbalances\" means any situation\n                  in which any party entitled, including Seller, to produce gas\n                  from a Well in which Seller owns a working interest has\n                  produced such gas in excess of its pro rata share and thereby\n                  has incurred a future liability or makeup obligation.\n\n         (g)      PAYMENTS; SHARED OBLIGATIONS. If amounts are received by\n                  either Party hereto which, under the terms of this Article 9\n                  belong to the other Party, such amount shall immediately be\n                  paid over to the proper Party. If an invoice or other evidence\n                  of an obligation is received which under the terms of this\n                  Article 9 is partially the obligation of Seller and partially\n                  the obligation of Buyer, then the Parties shall consult each\n                  other and each shall promptly pay its portion of such\n                  obligation to the obligee.\n\n         (h)      POST-CLOSING ADJUSTMENTS. Within ninety (90) days after\n                  Closing, each Seller shall prepare and deliver to Buyer, in\n                  accordance with this Agreement and generally accepted\n                  accounting principles, a statement (herein called the \"Final\n                  Settlement \n\n\n\n                                     29\n\n   31\n\n\n                  Statement\"), setting forth each adjustment or payment that\n                  was not finally determined as of the Closing or in accordance\n                  with Articles 9(a)-(e) and 9(g), above, and showing the\n                  calculation of such adjustments. As soon as practicable after\n                  receipt of the Final Settlement Statement, Buyer shall\n                  deliver to each Seller a written report containing any\n                  changes that Buyer proposes be made to the Final Settlement\n                  Statement. The Parties shall undertake to agree with respect\n                  to the amounts due pursuant to such post-Closing adjustment\n                  no later than thirty (30) days after Buyer's receipt of the\n                  Final Settlement Statement. The date upon which such\n                  agreement is reached shall be herein called the \"Final\n                  Settlement Date.\" In the event, as a result of the Final\n                  Settlement Statement (I) Buyer owes either Seller additional\n                  monies, Buyer shall pay such Seller or to such Seller's\n                  account (as designated by such Seller) in immediately\n                  available federal funds such amount; or (ii) either Seller\n                  owes Buyer monies, such Seller shall pay Buyer or to Buyer's\n                  account (as designated by Buyer) in immediately available\n                  federal funds such amount. Payment by Buyer or either Seller\n                  shall be made within five (5) days after the Final Settlement\n                  Date.\n        \n\n                                   ARTICLE 10\n                            CONFIDENTIALITY AGREEMENT\n\n         Each Party, its Affiliates and its and their directors, officers,\nemployees, agents, representatives, consultants, investors and lenders, agree to\nkeep the terms and conditions of this Agreement and all proprietary and\nconfidential information exchanged between Buyer and Seller in connection with\nthis Agreement, confidential, and to not disclose the existence of this\nAgreement without the prior written consent of the other Party, which consent\nmay be withheld at either Party's sole discretion, for a period not to exceed\none year from the Closing Date. The foregoing restriction shall not apply to\ndisclosures and information which (i) are required to comply with applicable\nstatutes and regulations; (ii) are required to enforce this Agreement; (iii) are\nrequired to obtain financing related to the transactions contemplated hereby;\n(iv) enter the public domain through a third party who does not thereby breach\nan obligation of confidentiality; or (v) are made in association with press\nreleases issued in accordance with Article 14.01 hereof.\n\n\n                                   ARTICLE 11\n                                     CLOSING\n\n         11.01    Seller's Closing Obligations.  At Closing, Seller shall \ndeliver or cause to be delivered to Buyer the following:\n\n         (a)      CONVEYANCE DOCUMENTS.  The Conveyance Documents;\n\n         (b)      OPINION OF COUNSEL. An opinion of counsel to the Seller\n                  substantially in the form of Exhibit \"11.01(b)\" attached\n                  hereto and made a part hereof for all purposes; and\n\n\n\n\n                                     30\n\n   32\n\n\n\n         (c)      REGISTRATION RIGHTS AGREEMENT. The Registration Rights\n                  Agreement dated the Closing Date, substantially in the form of\n                  Exhibit 11.01(c) .\n\n         11.02 Buyer's Closing Obligations. Buyer shall deliver to Seller at\nClosing with respect to items (a) and (c) listed below and within thirty (30)\ndays after Closing with respect to item (b) hereinbelow the following:\n\n         (a)      OPINION OF COUNSEL. The opinion of counsel to the Buyer\n                  substantially in the form of Exhibit \"11.02(a)\" attached\n                  hereto and made a part hereof for all purposes;\n\n         (b)      SHARES. A certificate or certificates in definitive form\n                  representing the Shares to be issued pursuant to Article\n                  3.01(b); and\n\n         (c)      REGISTRATION RIGHTS AGREEMENT AND OTHER RELATED AGREEMENTS.\n                  The Registration Rights Agreement substantially in the form of\n                  Exhibit 11.01(c) ( and the other Related Agreements in\n                  substantially in the forms of Exhibits G and H.\n\n\n                                   ARTICLE 12\n                         CASUALTY LOSS AND CONDEMNATION\n\n         If, prior to the Closing Date, all or any portion of the Assets are\ndestroyed by fire or other casualty or are taken in condemnation or under right\nof eminent domain or proceedings for such purpose are pending or threatened in\nwriting, Buyer may elect to purchase such Assets or portions thereof\nnotwithstanding any such destruction, taking or pending or threatened taking\n(without reduction in the Purchase Price with respect thereto), in which case\nSeller shall, at the Closing, pay to Buyer all sums paid to Seller by third\nparties (including insurers) by reason of the destruction or taking of such\nAssets, and shall assign, transfer and set over unto Buyer all of Seller's\nright, title and interest in and to any unpaid awards or other amounts due from\nthird parties (including insurers) arising out of the destruction, taking or\npending or threatened taking of such Assets or portions thereof. Prior to\nClosing, Seller shall not voluntarily compromise, settle or adjust any amounts\npayable by reason of any destruction, taking or pending or threatened taking as\nto the Assets or portions thereof without first obtaining the written consent of\nBuyer.\n\n\n                                   ARTICLE 13\n                                 BUYER'S OPTION\n\n         13.01 Grant of Option. As stated in Article 2.01(c) above, Buyer shall\nhave an ongoing option for one year from and after the Closing Date to purchase\nall of Seller's remaining 25% interest in the St. Martinville Prospect Area and\nthe S. Bayou Boeuf Prospect Area, and a like undivided interest in all wells and\nEquipment located thereon (the \"Option Assets\"). Seller shall not sell or\n\n\n\n                                     31\n\n   33\n\n\n\ndispose of any portion of the Option Assets during this option period and any\nencumbrances created by, through or under Seller shall be made expressly subject\nto Buyer's option.\n\n         13.02 Option Closing. In order to exercise the option, Buyer will give\nSeller written notice of its exercise. The closing (\"Option Closing\") of the\npurchase under the option shall occur 10 business days thereafter, and at the\nOption Closing Seller shall deliver Conveyance Documents, with only the changes\nthat may be necessary, including the naming of Buyer's nominee or assignee, if\napplicable, as the grantee in such instruments conveying and transferring the\nOption Assets to Buyer. The price payable at the Option Closing shall be\n$5,750,000, less an amount equal to 25% of the value of any of the Reserve\nShares that Seller was not entitled to receive for acquiring renewal leases\nunder Article 8.03(b). The fact that the Reserve Shares due under Article\n8.03(b) constitute a component of the amount due under the option purchase price\nshall not diminish the amount that may be due under Article 8.03(b). Buyer may\npay for the interests purchased through the exercise of this option by\ndelivering Shares (\"Additional Shares\") or by cash, at Buyer's option. If the\nAdditional Shares are delivered, the number shall be determined by dividing the\nappropriate value by the average of the last reported Sales Price for the Shares\nfor the thirty (30) consecutive calendar days immediately preceding the Option\nClosing. Buyer shall give two (2) business day's notice of whether Buyer will\npay with cash or Additional Shares. Any Additional Shares delivered under this\nArticle 13.02 shall be registered under the same procedures as contained in the\nRegistration Rights Agreement. At the Option Closing, Buyer and Seller will\nexecute and deliver certificates through which Seller makes the representations\nand warranties contained in Article 4.01 and Article 5, and Buyer makes the\nrepresentations and warranties contained in Article 4.02, with any references in\nsuch provisions to the Assets being modified to refer to the Option Assets;\nreferences to Effective Date being the date of Buyer's exercise of the Option;\nreferences to the Closing being the Option Closing; and references to Shares\nbeing the Additional Shares. Further, the Parties agree that, if Buyer exercises\nthe option, the provisions of Article 7, Article 8 and Article 9 shall also\npertain to the Option Closing and the Option Assets, with the appropriate\nchanges noted in the preceding sentence being effectuated for the proper\nconstruction of these provisions with regard to the Option Closing; provided,\nhowever, with regard to the Option closing and Option Assets, the\nrepresentations and warranties contained in Article 4.01, Article 4.02 and\nArticle 5 and the indemnities contained in Article 7 shall only survive for six\n(6) months following the Option Closing.\n\n         13.03 Obligations of Seller at Option Closing. Seller agrees that, with\nrespect to the period following the Option Closing:\n\n         (a)      RECORDS. On or before five (5) business days after Option\n                  Closing (the \"Records Delivery Date\"), Seller shall deliver to\n                  Buyer, at Buyer's offices in Irving, Texas, the originals of\n                  all Records. Seller shall be entitled to retain, or to obtain\n                  from Buyer at Seller's cost, one copy of all such information\n                  for its records as may be reasonably necessary for Seller to\n                  address matters relative to its ownership and operation of the\n                  Assets, including, without limitation, the preparation of\n                  accounting and financial information, the filing of tax\n                  returns and the pursuing or defending of litigation.\n\n\n\n\n                                     32\n\n   34\n\n\n\n         (b)      SUSPENSE FUNDS. As soon as practicable after Closing, Seller\n                  shall provide Buyer with a list showing all proceeds from\n                  production attributable to the Option Assets which are\n                  currently held in suspense and, except as to funds in suspense\n                  for the account of Gregg Production Company, transfer to Buyer\n                  all such proceeds. Buyer shall be responsible for distribution\n                  of such proceeds to the parties lawfully entitled thereto, and\n                  agrees to indemnify, defend and hold harmless Seller from and\n                  against any and all Losses arising out of or relating to the\n                  proceeds so transferred, except for any Losses caused by\n                  Seller's negligence or willful misconduct.\n\n         (c)      RETAINED LIABILITIES. Seller retains and shall remain liable\n                  and responsible for, and Buyer specifically does not assume,\n                  any liabilities and obligations of Seller not related to or\n                  arising out of the ownership, use, maintenance and operation\n                  of the Option Assets, whether known or unknown, accrued or\n                  contingent and not otherwise specifically set forth in this\n                  Agreement.\n\n         13.04 Certain Obligations of Buyer. Each Buyer agrees that, with\nrespect to the period following the Option Closing:\n\n         (a)      RECORDING. Within (30) days following Option Closing, Buyer\n                  shall record those Conveyance Documents necessary to evidence\n                  in the public record that Buyer has acquired the Option Assets\n                  and within a reasonable time thereafter, Buyer shall supply\n                  Seller with a true and accurate photocopy of the recorded and\n                  filed Conveyance Documents covering the Option Assets. In the\n                  event Buyer fails to record any such Conveyance Document\n                  within such time period, Seller may, but shall not be\n                  obligated to, record such Conveyance Document on Buyer's\n                  behalf and at Buyer's cost (for which Buyer will promptly\n                  reimburse Seller upon demand).\n\n         (b)      REMOVAL OF NAMES. As soon as reasonably practicable after\n                  Option Closing, Buyer shall cause to be removed the names and\n                  marks of Seller and any variations and derivations thereof and\n                  logos relating thereto from any of the Assets, and will not\n                  thereafter make any use whatsoever of such names, marks, and\n                  logos; provided, however, that the Buyer shall have no\n                  obligation to remove such names or marks from any lease site\n                  or well until such time as such names or marks are removed in\n                  the ordinary course of the Buyer's business. Buyer shall\n                  indemnify Seller for any Losses it suffers as a result of the\n                  Buyer's non-removal of such names or marks after the Option\n                  Closing.\n\n\n                                   ARTICLE 14\n                              GOVERNMENTAL CONSENTS\n\n         At the Closing and Option Closing, if any, Seller shall execute and\ndeliver to Buyer such assignments of federal, state and Indian leases as require\nconsent to assignment, on the forms\n\n\n\n                                     33\n\n   35\n\n\n\nrequired by the governmental or tribal agency having jurisdiction thereof. Buyer\nshall promptly file for and obtain the necessary approvals for such assignments.\nUntil such approvals (the \"Govern mental Approvals\") are obtained, Seller shall\ncontinue to hold governmental title to such leases as nominee for Buyer.\n\n\n                                   ARTICLE 15\n                                  MISCELLANEOUS\n\n         15.01 Press Releases and Public Announcements. Neither Party shall\nissue any press release or make any public announcement relating to the subject\nmatter of this Agreement prior to the Closing or Option Closing, if any, without\nthe prior approval of the other Party, which approval shall not be unreasonably\nwithheld; provided, however, that either Party may make any public disclosure it\nbelieves in good faith is required by applicable law or any listing or trading\nagreement concerning its publicly traded securities (in which case the\ndisclosing Party will use its reasonable best efforts to advise the other Party\nprior to making the disclosure).\n\n         15.02 Entire Agreement. This Agreement (including the documents\nreferred to herein) constitutes the entire agreement between the Parties and\nsupersedes any prior agreements, or representations by or between the Parties,\nwritten or oral, to the extent they have related in any way to the subject\nmatter hereof.\n\n         15.03 Succession and Assignment. This Agreement shall be binding upon\nand inure to the benefit of the Parties and their respective successors and\npermitted assigns. Neither Party may assign either this Agreement or any of its\nrights, interests, or obligations hereunder without the prior written approval\nof the other Party, which approval shall not be unreasonably withheld.\n\n         15.04 Counterparts. This Agreement may be executed in one or more\ncounterparts, each of which shall be deemed an original but all of which\ntogether will constitute one and the same instrument.\n\n         15.05 Headings. The section or Article headings contained in this\nAgreement are inserted for convenience only and shall not affect in any way the\nmeaning or interpretation of this Agreement.\n\n         15.06 Governing Law. This Agreement shall be governed by and construed\nin accordance with the domestic laws of the State of Texas without giving effect\nto any choice or conflict of law provision or rule (whether of the State of\nTexas or any other jurisdiction) that would cause the application of the laws of\nany jurisdiction other than the State of Texas.\n\n         15.07 Legal Fees. The prevailing party in any legal proceeding brought\nunder or to enforce this Agreement shall be additionally entitled to recover\ncourt costs and reasonable attorney's fees from the nonprevailing party. Each\nParty shall pay their respective legal costs associated with the negotiation and\ndrafting of this Agreement.\n\n\n\n                                     34\n\n   36\n\n\n\n         15.08 Exhibits. All exhibits and schedules hereto which are referred to\nherein are hereby made a part hereof and incorporated herein by such reference.\n\n         15.09 Waiver. Any of the terms, provisions, covenants, representations,\nwarranties or conditions hereof may be waived only by written instrument\nexecuted by the Party waiving the compliance. The failure of either Party at any\ntime or times to require performance of any provisions hereof shall in no manner\naffect such Party's right to enforce the same. No waiver by either Party of any\ncondition or of the breach of any term, provision, covenant, representation or\nwarranty contained in this Agreement, whether by conduct or otherwise, in any\none or more instances, shall be deemed to be construed as a further or\ncontinuing waiver of any such condition or breach, or a waiver of any other\ncondition or of the breach of any other term, provision, covenant,\nrepresentation or warranty.\n\n         15.10 Further Assurances. After the Closing and Option Closing, if any,\neach of the Parties will execute, acknowledge, and deliver to the other such\nfurther instruments, and take such other actions, as may be reasonably requested\nin order to more effectively assure to said Party all of the respective\nproperties, rights, titles, interests, estates, and privileges intended to be\nassigned, delivered, or inuring to the benefit of such Party in consummation of\nthe transactions contemplated hereby.\n\n         15.11 Resignation as Operator, etc. At the Option Closing, Seller shall\nexecute and deliver to Buyer appropriate letters resigning as the Operator of\nany of the Assets or Option Assets that Seller is operating and other\nappropriate documents concerning transfer of operations. Buyer acknowledges and\nagrees that Seller cannot and does not covenant or warrant that Buyer shall\nbecome successor operator of all or any portion of the Assets or Option Assets,\nsince the Assets or Option Assets or portions thereof may be subject to unit,\npooling, communitization, operating or other agreements which control the\nappointment of a successor operator; provided, however, that Seller agrees to\nuse its reasonable best efforts to assist Buyer in becoming successor operator.\n\n         15.12 Notices. All notices, requests, demands, claims and other\ncommunications hereunder will be in writing. Any notice, request, demand, claim\nor other communication hereunder shall be deemed duly given if (and then two\nbusiness days after) it is sent by registered or certified mail, return receipt\nrequested, postage prepaid, and addressed to the intended recipient as set forth\nbelow:\n\n                  IF TO SELLER:\n\n                  Bargo Energy Company\n                  700 Louisiana, Suite 3700\n                  Houston, Texas 77002\n                  Attention:  Mr. Tim J. Goff, President\n                  Telephone:  (713) 236- 9792\n                  Fax:        (713) 236-9799\n\n\n\n\n                                     35\n\n   37\n\n\n\n                  with a copy to:\n\n                  EnCap Investments L.C.\n                  1100 Louisiana, Suite 3150\n                  Houston, Texas  77002\n                  Attention: Mr. D. Martin Phillips\n                  Telephone: (713) 659-6100\n                  Fax:       (713) 659-6130\n\n                  IF TO BUYER:\n\n                  Harken Energy Corporation\n                  Harken Exploration Company\n                  5605 North MacArthur, Suite 400\n                  Irving, Texas 75038\n                  Attention: Mr. Larry Cummings, Vice President and Secretary\n                  Telephone: (972) 753-6932\n                  Fax:       (972) 753-6963\n\nAny Party may send any notice, request, demand, claim, or other communication\nhereunder to the intended recipient at the address set forth above using any\nother means (including personal delivery, expedited courier, messenger service,\ntelecopy, telex, ordinary mail, or electronic mail), but no such notice,\nrequest, demand, claim, or other communication shall be deemed to have been duly\ngiven unless and until it actually is received by the intended recipient. Any\nParty may change the address to which notices, requests, demands, claims, and\nother communications hereunder are to be delivered by giving the other Party\nnotice in the manner herein set forth.\n\n         15.13 Disclaimer of Representations and Warranties. Except as expressly\nset forth in this Agreement and in Conveyance Documents delivered pursuant to\nArticle 11.01(a) and Article 13.02, the Parties hereto make no, and disclaim\nany, representation or warranty whatsoever, whether express or implied. Each\nParty hereto disclaims all liability and responsibility for any other\nrepresentation, warranty, statement, or communication (orally or in writing) to\nthe other Party (including, but not limited to, any information contained in any\nopinion, information, or advice that may have been provided to any such Party by\nany officer, stockholder, director, partner, member, manager, employee, agent,\nconsultant, representative, or contractor of such disclaiming Party or its\nAffiliates or any engineer or engineering firm, or other agent, consultant, or\nrepresentative) wherever and however made. Without limiting the generality of\nthe foregoing, Seller makes no representation or warranty as to (a) the amount,\nvalue, quality, or deliverability of petroleum, natural gas, or other reserves\nattributable to the Assets or any portion thereof, or (b) any geological,\nengineering, or other interpretations or economic evaluations. EXCEPT AS\nEXPRESSLY PROVIDED IN ARTICLE 4.01(F), ALL TANGIBLE PERSONAL PROPERTY,\nEQUIPMENT, FIXTURES AND APPURTENANCES CONSTITUTING A PART OF THE ASSETS ARE SOLD\n\"AS IS, WHERE IS,\" AND SELLER MAKES NO, AND DISCLAIMS ANY, REPRESENTATION\n\n\n\n                                     36\n\n   38\n\n\n\nOR WARRANTY, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON LAW, STATUTE, OR\nOTHERWISE, AS TO (I) MERCHANTABILITY, (II) FITNESS FOR ANY PARTICULAR PURPOSE,\n(III) CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, AND\/OR (IV) CONDITION. The\nParties agree that the preceding disclaimers of warranty are \"conspicuous\"\ndisclaimers for purposes of any applicable law, rule, or order.\n\n         15.14 Seller's Liabilities Several and Not Joint. Notwithstanding\nanything herein contained to the contrary, it is understood and agreed that the\nobligations and liabilities of Seller hereunder are several, and not joint or\njoint and several, with respect to that portion of the Assets owned by SMPL and\nBargo, respectively. More specifically, it is understood and agreed that:\n\n                  (a) The representations and warranties set forth in Article\n         4.01, the environmental representations and warranties set forth in\n         Article 5.01, the environmental covenant set forth in Article 6.01, the\n         indemnification provision for the benefit of Buyer set forth in Article\n         7.03 and the post-closing covenants set forth in Article 8.01 shall\n         bind SMPL insofar and only insofar as the same pertain to the St.\n         Martinville Prospect Area, the Bol Mex Prospect Area and that part or\n         portion of the Assets included therein, and SMPL shall have no\n         liability or obligation whatsoever under the above-referenced or any\n         other provisions hereof with respect to the S. Bayou Boeuf Prospect\n         Area or that part or portion of the Assets included therein; and\n\n                  (b) The representations and warranties set forth in Article\n         4.01, the environmental representations and warranties set forth in\n         Article 5.01, the environmental covenant set forth in Article 6.01, the\n         indemnification provision for the benefit of Buyer set forth in Article\n         7.03 and the post-closing covenants set forth in Article 8.01 shall\n         bind Bargo insofar and only insofar as the same pertain to the S. Bayou\n         Boeuf Prospect Area and that part or portion of the Assets included\n         therein, and Bargo shall have no liability or obligation whatsoever\n         under the above-referenced or any other provisions hereof with respect\n         to the St. Martinville Prospect Area, the Bol Mex Prospect Area or that\n         part or portion of the Assets included therein.\n\nFurthermore, no default by one Seller under this Agreement shall affect in any\nway the right of a non-defaulting Seller to enforce this Agreement by\nappropriate proceedings at law or in equity.\n\n         15.15 Severability. Any term or provision of this Agreement that is\ninvalid or unenforce able in any situation and in any jurisdiction shall not\naffect the validity or enforceability of the remaining terms and provisions\nhereof or the validity or enforceability of the offending term or provision in\nany other situation or in any other jurisdiction.\n\n         15.16 Texas Deceptive Trade Practices Act Waiver. Buyer (a) represents\nand warrants to Seller that it (i) is acquiring the Assets for commercial or\nbusiness use, (ii) has assets in excess of $25,000,000 and (iii) has knowledge\nand experience in financial and business matters such that enable it to evaluate\nthe merits and risks of the transactions contemplated by this Agreement and is\n\n\n\n                                     37\n\n   39\n\n\n\nnot in a significantly disparate bargaining position with respect to Seller; and\n(b) hereby unconditionally and irrevocably waives any and all rights or remedies\nit may have under the Deceptive Trade Practices - Consumer Protection Act of the\nState of Texas, Tex. Bus. &amp; Com. Code ss. 17.41 et seq., other than any of the\nprovisions of ss. 17.555 of such Act, if such Act would for any reason be deemed\napplicable to the transactions contemplated hereby.\n\n         15.17 No Third Party Beneficiaries. Except as provided for in Article 7\nhereof with respect to the rights of an Indemnified Party, this Agreement shall\nnot confer any rights or remedies upon any person other than the Parties and\ntheir respective successors and permitted assigns, and other persons given\nrights of indemnification hereunder.\n\n         15.18 Construction. The Parties have participated jointly in the\nnegotiating and drafting of this Agreement. In the event ambiguity or question\nof intent or interpretation arises, this Agreement shall be construed as if\ndrafted jointly by the Parties and no presumption or burden of proof shall arise\nfavoring or disfavoring either Party by virtue of the authorship of any of the\nprovisions of this Agreement. Any reference to any federal, state, local or\nforeign statute or law should be deemed also to refer to all rules and\nregulations promulgated thereunder, unless the contexts requires otherwise. The\nword \"including\" shall mean including, without limitation. If the date specified\nin this Agreement for giving any notice or taking any action is not a business\nday (or if the period during which any notices required to be given or any\naction taken expires on a date which is not a business day) then the date for\ngiving such notice or taking such action (and the expiration date for such\nperiod during which notice is required to be given or action taken) shall be the\nnext day which is a business day.\n\n\n\n\n\n                                     38\n\n   40\n\n\n\n         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as\nof the date first above written, but effective for all purposes as of the\nEffective Date.\n\n                             SELLER:\n\n                             ST. MARTINVILLE PARTNERS, LTD.\n\n                             By:      Bargo Energy Partners, Ltd., General \n                                      Partner\n\n                             By:      Bargo Energy Corporation\n\n\n                             By:      \/s\/ Tim J. Goff\n                                ---------------------------------------\n                                      Tim J. Goff, President\n\n                             BARGO ENERGY COMPANY\n\n\n                             By:      \/s\/ Tim J. Goff\n                                ---------------------------------------\n                                      Tim J. Goff, Manager\n\n\n                             BUYER:\n\n                             HARKEN ENERGY CORPORATION\n\n\n                             By:      \/s\/ Larry E. Cummings\n                                ---------------------------------------\n                                      Larry E. Cummings, Vice President\n\n\n                             HARKEN EXPLORATION COMPANY\n\n\n                             By:      \/s\/ Larry E. Cummings\n                                ---------------------------------------\n                                      Larry E. Cummings, Vice President\n\n\n\n\n\n                                     39\n\n   41\n\n\n                                LIST OF EXHIBITS\n\n\nExhibit A         Well List with Working Interest and Net Revenue Decimals\nExhibit A-1       St. Martinville Prospect Area\nExhibit A-2       S. Bayou Beouf Prospect Area\nExhibit A-3       Bol Mex Prospect Area\nExhibit B         Assignment, Bill of Sale and Conveyance\nExhibit C         Equipment\nExhibit D         Easements\nExhibit E         Contests of Liens\nExhibit F         Product Contracts\nExhibit G         Easement Agreement\nExhibit H         Excluded Assets\nExhibit I         Authorization for Expenditures\nExhibit J         Disclosure under Article 4.01\nExhibit K         Operating Agreement\nExhibit L         Act of Acknowledgment of Mineral Servitude\nExhibit 4.02(j)   Capitalization Schedule\nExhibit 9(f)      Gas Imbalances\nExhibit 8.03(b)   Expiring Leases\nExhibit 11.01(b)  Opinion of Seller's Counsel\nExhibit 11.01(c)  Registration Rights Agreement\nExhibit 11.02(a)  Opinion of Buyers' Counsel\n\n\n\n                                     40\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7721],"corporate_contracts_industries":[9409],"corporate_contracts_types":[9623,9622],"class_list":["post-43321","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-harken-oil---gas-inc","corporate_contracts_industries-energy__exploration","corporate_contracts_types-planning__asset","corporate_contracts_types-planning"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43321"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43321"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43321"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}