{"id":43402,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/exchange-agreement-momentum-operating-co-and-harken.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"exchange-agreement-momentum-operating-co-and-harken","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/exchange-agreement-momentum-operating-co-and-harken.html","title":{"rendered":"Exchange Agreement &#8211; Momentum Operating Co. and Harken Exploration Co."},"content":{"rendered":"<pre>                               EXCHANGE AGREEMENT\n\n\n         This EXCHANGE AGREEMENT (this 'Exchange Agreement') is made and\nentered into this 11th day of July, 1996, but effective as of the 30th day of\nJune, 1996, by and among Momentum Operating Co., Inc. ('Momentum'), Harken\nEnergy Corporation ('HEC') and Harken Exploration Company ('HEX').\n\n                                   RECITALS:\n\n         A.      On December 15, 1995, Momentum, HEC and HEX entered into that\ncertain Purchase and Sale Agreement (the 'Original Agreement'), pursuant to\nwhich, in exchange for the consideration described in the Original Agreement,\nMomentum sold the Properties (as defined in the Original Agreement) to HEX.\n\n         B.      On December 20, 1995, upon the closing of the transactions\ncontemplated by the Original Agreement and among other actions:\n\n                 (1)      HEX issued to Momentum a promissory note dated\nDecember 20, 1995 in the original principal amount of $13,000,000 (the 'Note');\n\n                 (2)      HEC and Momentum entered into that certain\nRegistration Rights Agreement (the 'Original Registration Rights Agreement');\nand\n\n                 (3)      HEX executed that certain Deed of Trust, Security\nAgreement, Assignment of Production and Financing Statement in favor of John\nHuffman, Trustee, for the benefit of Momentum Operating Co., Inc. (the 'Deed of\nTrust').\n\n         C.      Momentum wishes to exchange the Note for shares of common\nstock, $.01 par value per share (the 'Common Stock') of HEC and certain\nobligations of HEX and HEC is willing to issue shares of its Common Stock in\nexchange for the Note and HEX is willing to so obligate itself, and Momentum,\nHEX and HEC desire to amend certain terms of, the Original Registration Rights\nAgreement and the Deed of Trust, all on the terms and conditions contained\nherein.\n\n         NOW, THEREFORE, in consideration of the mutual premises and the mutual\ncovenants herein, the parties hereto agree as follows:\n\n                                   AGREEMENT\n\n         1.      EXCHANGE.\n\n                 (a)      Subject to the terms of this Exchange Agreement, the\nparties hereto agree to exchange the Note for the shares of Common Stock\ndescribed in paragraph (b) below and the obligations of HEX described in\nSection 3 below.  HEC will use its reasonable best efforts to deliver the\nshares of Common Stock described in paragraph (b)(i) below to Momentum within\n15 business days following the execution of this Exchange Agreement.  HEC shall\ndeliver additional shares of Common Stock pursuant to the terms of the letter\nagreement described in paragraph (b)(viii) below.  The date upon which the\nshares of Common Stock are delivered to Momentum shall be referred to as the\n'Issuance Date.'\n\n                 (b)      Upon the Issuance Date, the following actions shall\ntake place, each of which shall be deemed to occur simultaneously and each of\nwhich shall be a condition precedent to each of the others:\n\n                          (i)     HEC shall deliver to Momentum a stock\ncertificate registered in the name of Momentum and representing 4,965,000\nshares of Common Stock;\n\n                          (ii)    Momentum shall deliver the Note to HEX,\nmarked 'paid in full, except as provided in that certain Exchange Agreement\ndated July 11, 1996, among Seller, Buyer and the Company';\n\n                          (iii)   HEC and Momentum shall execute and deliver\nthe Registration Rights Agreement in the form attached hereto as Exhibit A.\nMomentum agrees to waive any and all registration rights granted to Momentum\npursuant to the Original Registration Rights Agreement insofar as the Original\nRegistration Rights Agreement might otherwise apply to the registration of the\nshares of Common Stock delivered pursuant to this Exchange Agreement;\n\n                          (iv)    HEC and Momentum shall execute and deliver\nthe Supplemental Deed of Trust, Security Agreement, Assignment of Production\nand Financing Statement, in the form attached hereto as Exhibit B;\n\n                          (v)     HEC shall deliver to Momentum a release of\nthe HEC Mortgage (as defined in the Original Agreement) executed by HEC, HEX\nand Larry E. Cummings, Trustee;\n\n\n\n\n\n                                       2\n\n                          (vi)    HEC and HEX shall deliver to Momentum the\nopinions of counsel in the forms attached hereto as Exhibit C.1 and Exhibit\nC.2;\n\n                          (vii)   HEC and HEX shall deliver to Momentum the\nOfficer's Certificates in the forms attached hereto as Exhibit D.1 and Exhibit\nD.2; and\n\n                          (viii)  HEX, HEC and Momentum will enter into the\nletter agreement attached hereto as Exhibit E.\n\n         2.      EFFECT OF EXCHANGE.       Except for the contingent payment\ndescribed in Section 3 below, tender of full performance by HEC and HEX of\ntheir obligations contained in Section 1(b) above shall constitute full payment\nof all amounts due under the Note.  In addition any and all obligations of\nMomentum, HEX or HEC pursuant to Section 7.1 of the Original Agreement shall\nalso be deemed to have been satisfied.\n\n         3.      CONTINGENT PAYMENT.\n\n                 (a)      Momentum shall calculate the gross proceeds, before\ndeducting any commissions and other costs of sale, received by Momentum on or\nbefore the Contingent Payment Date which are attributable to the sale of the\nshares of Common Stock issued to Momentum pursuant to this Exchange Agreement\n('the Proceeds').  The Contingent Payment Date shall be the earlier to occur of\n(i) the expiration of 270 days following the date the registration statement\nfiled by HEC pursuant to Momentum's second Demand Registration (as defined in\nthe Registration Rights Agreement) is declared effective by the Securities and\nExchange Commission, or (ii) the date on which Momentum has sold all of the\nshares of Common Stock issued to Momentum pursuant to this Exchange Agreement.\nIf the Contingent Payment Date falls on a day which is not a trading day on the\nAmerican Stock Exchange, the Contingent Payment Date shall be deemed to be the\nnext trading day.  If Momentum has not sold all of the shares of the Common\nStock as of the close of trading on the American Stock Exchange on the\nContingent Payment Date, the Proceeds shall be deemed to include an amount\nequal to the product of the number of shares of Common Stock held by Momentum\nat the close of trading on the Contingent Payment Date multiplied by the\narithmetic mean of the daily closing sales prices of the Common Stock on the\nAmerican Stock Exchange, as reported in the Wall Street Journal, for the sixty\n(60) trading days that Momentum was entitled to sell shares of Common Stock\npursuant to the Registration Rights Agreement immediately preceding the\nContingent Payment Date.  If the Proceeds are less than U.S. $8,500,000, HEX\nshall pay to Momentum an amount in cash equal to the difference between U.S.\n$8,500,000 and the Proceeds.  HEX shall make such payment within five business\ndays after receipt of Momentum's notice that the additional payment is due,\naccompanied by documentation supporting Momentum's calculation of the Proceeds.\n\n\n\n\n\n                                       3\n\n                 (b)      If there is any dispute concerning the payment\nrequired by paragraph (a) above, HEX shall pay to Momentum the undisputed\nportion and shall submit the disputed portion to binding arbitration. Momentum\nand HEX shall each select a mutually acceptable person as an arbitrator and the\ntwo arbitrators so chosen shall mutually select a third arbitrator.  The group\nof three arbitrators shall determine the amount of the payment required by\nparagraph (a) above.  If the two arbitrators selected by Momentum and HEX\ncannot agree on a third arbitrator, or successor arbitrator if necessary, the\nparties shall request the American Arbitration Association to appoint the third\narbitrator or successor arbitrator.  All arbitration hearings shall be held in\nAbilene, Texas and shall begin within thirty days after delivery of written\nnotice from one party to the other party and the arbitrators stating the\ngrounds for submitting an issue to arbitration.  The arbitrators shall\narbitrate the dispute in accordance with the terms of this Exchange Agreement,\nthe Texas General Arbitration Act, and the Rules of the American Arbitration\nAssociation to the extent such rules are not in conflict with the terms of this\nExchange Agreement or the Act.  The arbitrators shall issue a written decision\nwhich shall be final and binding on Momentum and HEX and may be enforced in any\ncourt having jurisdiction.  Momentum and HEX shall bear their own legal fees\nand other costs incurred in connection with presenting their respective cases.\nThe costs and expenses of the arbitrators shall be shared equally by Momentum\nand HEX.  In fulfilling their duties, the arbitrators shall be bound by the\nterms of this Exchange Agreement and may consider other matters which, in the\nopinion of the arbitrators, are necessary or helpful to make a proper decision.\n\n         4.1     MOMENTUM'S REPRESENTATIONS.  Momentum represents to HEC and\nHEX that as of the date hereof and as of the Issuance Date:\n\n                 (a)      Momentum is a corporation duly organized, validly\nexisting and in good standing under the laws of the State of Texas.  Momentum\nis qualified to do business in the State of Texas.\n\n                 (b)      Momentum has the power and authority to carry on its\nbusiness as presently conducted, to enter into this Exchange Agreement and to\nperform its obligations under this Exchange Agreement.\n\n                 (c)      Execution and delivery of this Exchange Agreement,\nconsummation of the transactions contemplated by this Exchange Agreement, and\nperformance of all obligations under this Exchange Agreement have been\nauthorized by all necessary action, corporate and otherwise, on the part of\nMomentum.  Execution and delivery of this Exchange Agreement does not, and the\nconsummation of the transactions contemplated by this Exchange Agreement will\nnot, violate or be in conflict with any agreement, instrument, judgment, order,\ndecree, law, rule or regulation by which Momentum is bound.\n\n\n\n\n\n                                       4\n\n                 (d)      Subject to laws and equitable principles affecting\nthe rights of creditors generally, this Exchange Agreement is a binding\nobligation of Momentum enforceable according to its terms.\n\n                 (e)      No suit, claim, demand or investigation is pending\nor, to Momentum's knowledge, is threatened, that would effect Momentum's\ninterest in the Note.  There are no bankruptcy or reorganization proceedings\npending or, to Momentum's knowledge, threatened against Momentum.  As used in\nthis Exchange Agreement, the term 'knowledge' means actual awareness of\nrelevant facts and actual awareness of facts which would cause a person\nexercising reasonable prudence to discover relevant facts.\n\n                 (f)      With respect to the shares of Common Stock which\nMomentum may receive pursuant to Section 1 hereof:\n\n                          (1)     Momentum is acquiring the Common Stock for\nits own account, and for the account of certain Momentum affiliates, for\ninvestment only and not with a view toward the public sale or distribution of\nthe Common Stock in contravention of any laws, rules or regulations;\n\n                          (2)     Momentum is an 'Accredited Investor' as that\nterm is defined in Rule 501 of Regulation D by reason of Rule 501(a)(3) of the\nSecurities Act of 1933, as amended (the '1933 Act');\n\n                          (3)     Momentum has engaged its own advisors for\nadvice and counsel concerning Momentum's acquisition of the Common Stock, so\nthat it is capable of evaluating the merits and risks of its investment in the\nCompany and has the capability to protect its own interests;\n\n                          (4)     all subsequent offers and sales of the Common\nStock by Momentum shall be made pursuant to registration of the Common Stock\nunder the 1933 Act or pursuant to a valid exemption from registration;\n\n                          (5)     Momentum understands that the Common Stock is\nbeing offered and sold to it in reliance on specific exemptions from the\nregistration requirements of United States federal and state securities laws\nand that HEC and HEX are relying upon the truth and accuracy of and Momentum's\ncompliance with the representations, warranties, agreements, acknowledgments\nand understandings of the Momentum in this Section 4.1(f) in order to determine\nthe availability of such exemptions and the eligibility of Momentum to acquire\nthe Common Stock;\n\n\n\n\n\n                                       5\n\n                          (6)     Momentum and\/or its advisors have been\nfurnished with all materials relating to the business, management, finances and\noperations of the Company and materials relating to the offer and sale of the\nCommon Stock which have been requested by Momentum.  Momentum and its advisors\nhave been afforded the opportunity to ask questions of the officers of the\nCompany and have received satisfactory answers to any such inquiries.  Without\nlimiting the generality of the foregoing, Momentum has had the opportunity to\nobtain and to review the Company's (i) Annual Report on Form 10-K\/A for the\nyear ended December 31, 1995, (ii) Quarterly Report on Form 10-Q for the\nquarter ended March 31, 1996, and (iii) Proxy Statement for the Annual Meeting\nof Stockholders of Harken held June 11, 1996;\n\n                          (7)     Momentum understands that no United States\nfederal or state agency or any other government or governmental agency has\npassed on or made any recommendation or endorsement of the Common Stock; and\n\n                          (8)     Momentum acknowledges that the Common Stock\nmust be held indefinitely unless subsequently registered under the 1933 Act or\nunless an exemption from such registration is available.  It is aware of the\nprovisions of Rule 144 promulgated under the 1933 Act which permit limited\nresale of shares purchased in a private placement subject to the satisfaction\nof certain conditions, including, among other things, the existence of a public\nmarket for the shares, the availability of certain current public information\nabout the Company, the resale occurring not less than two years after a party\nhas purchased and paid for the security to be sold, the sale being effected\nthrough a 'brokers transaction' or in transactions directly with a 'market\nmaker' and the number of shares being sold during any three-month period not\nexceeding specified limitations.\n\n         4.2     HEX'S REPRESENTATIONS.    HEX represents to Momentum that, as\nof the date hereof, and as of the Issuance Date:\n\n                 (a)      HEX is a corporation duly organized, validly existing\nand in good standing under the laws of the State of Delaware.  HEX is qualified\nto do business in the State of Texas.  HEX is qualified under all applicable\nlaws, rules and regulations to own and operate its properties.\n\n                 (b)      HEX has the power and authority to carry on its\nbusiness as presently conducted, to enter into this Exchange Agreement and to\nperform its obligations under this Exchange Agreement.\n\n                 (c)      Execution and delivery of this Exchange Agreement,\nconsummation of the transactions contemplated by this Exchange Agreement, and\nperformance of all\n\n\n\n\n\n                                       6\n\nobligations under this Exchange Agreement have been authorized by all necessary\naction, corporate and otherwise, on the part of HEX.  Execution and delivery of\nthis Exchange Agreement does not, and the consummation of the transactions\ncontemplated by this Exchange Agreement will not, violate or be in conflict\nwith any agreement, instrument, judgment, order, decree, law, rule or\nregulation by which HEX is bound.\n\n                 (d)      Subject to laws and equitable principles generally\naffecting the rights of creditors, this Exchange Agreement is a binding\nobligation of HEX enforceable according to its terms.\n\n                 (e)      None of HEX's statements or representations in this\nExchange Agreement contains any untrue statement of any material fact or omits\nto state any material fact necessary to be stated in order to make the\nstatements or representations made not misleading.\n\n                 (f)      As of the date of this Exchange Agreement, HEX in not\nin material breach of, or default under, the Original Agreement or any other\nagreement or instrument described in the Original Agreement or executed in\nconnection with the Original Agreement.\n\n         4.3     HEC'S REPRESENTATIONS.  HEC represents to Momentum that, as of\nthe date hereof and as of the Issuance Date:\n\n                 (a)      HEC is a corporation duly organized, validly existing\nand in good standing under the laws of the State of Delaware.  HEC is qualified\nto do business in the State of Texas.  HEC is qualified under all applicable\nlaws, rules and regulations to own and operate its properties.\n\n                 (b)      HEC has the power and authority to carry on its\nbusiness as presently conducted, to enter into this Exchange Agreement and to\nperform its obligations under this Exchange Agreement.\n\n                 (c)      Execution and delivery of this Exchange Agreement,\nconsummation of the transactions contemplated by this Exchange Agreement, and\nperformance of all of its obligations under this Exchange Agreement have been\nauthorized by all necessary action, corporate and otherwise, on the part of\nHEC.  Execution and delivery of this Exchange Agreement does not, and the\nconsummation of the transactions contemplated for it by this Exchange Agreement\nwill not, violate or be in conflict with any agreement, instrument, judgment,\norder, decree, law or regulation by which HEC is bound.\n\n\n\n\n\n                                       7\n\n                 (d)      Subject to laws and equitable principles generally\naffecting the rights of creditors, this Exchange Agreement is a binding\nobligation of HEC enforceable according to its terms.\n\n                 (e)      All shares of capital stock of HEC have been duly and\nvalidly authorized and issued and are fully paid and nonassessable.  The Common\nStock when issued, sold and delivered in accordance with the terms of this\nExchange Agreement, will be duly and validly issued, fully paid and\nnonassessable.  As of the date hereof, the authorized capital stock of HEC is\n125,000,000 shares of common stock, par value $.01, of which 84,712,471 shares\nare issued and outstanding and 10,000,000 shares of Preferred Stock, par value\n$1.00, of which no shares are issued or outstanding.    Except as disclosed in\nSchedule 4.3(e), (i) there are no outstanding subscriptions, warrants, options,\ncalls or commitments of any character relating to or entitling any person to\npurchase or otherwise acquire from HEC any capital stock of HEC, (ii) there are\nno obligations or securities convertible into or exchangeable for any shares of\ncapital stock of HEC or any commitments of any character relating to or\nentitling any person to purchase or otherwise acquire any such obligations or\nsecurities, and (iii) there are no preemptive or similar rights to subscribe\nfor or to purchase any capital stock of HEC.\n\n                 (f)      HEC's (i) unaudited consolidated balance sheet as at\nMarch 31, 1996 and the related consolidated statement of income, cash flows and\nshareholders' equity for the three months then ended and (ii) audited\nconsolidated balance sheet as at December 31, 1995 and the related audited\nconsolidated statement of income, cash flows and shareholders' equity for the\nfiscal year then ended (including in all cases the notes thereto)\n(collectively, the 'Financial Statements') have been prepared in accordance\nwith generally accepted accounting principles consistently applied except as\nnoted therein and except, in the case of unaudited interim financial\nstatements, for normal year-end adjustments, and fairly present the\nconsolidated financial position of HEC and its consolidated subsidiaries as of\nthe respective dates set forth therein and the results of operations and cash\nflows for HEC and its consolidated subsidiaries for the respective fiscal\nperiods set forth therein.\n\n                 (g)      Neither HEC nor any of its subsidiaries has sustained\nsince the date of the March 31, 1996 Financial Statements any adverse change in\nits businesses, financial condition or results of operations that would be\nmaterial to HEC and its subsidiaries on a consolidated basis.\n\n                 (h)      Assuming the accuracy of the representations of\nMomentum in Section 4.1(f) and except for the approval of the American Stock\nExchange with respect to the issuance of the shares of Common Stock required to\nbe issued pursuant to this Exchange Agreement, no consent, approval,\nauthorization, order, registration or qualification of or with\n\n\n\n\n\n                                       8\n\nany court or governmental agency or body is required by or on behalf of HEC\nwhich has not been obtained as of the date hereof, for the valid execution and\ndelivery of, or for the performance by HEC of its obligations under, this\nExchange Agreement.\n\n                 (i)      There are no legal or governmental proceedings\npending to which HEC or any of its subsidiaries is a party or to which any of\nits or their properties is subject, or which challenge the validity or legality\nof HEC's obligations under this Exchange Agreement or the transactions\ncontemplated thereby which, individually or in the aggregate, would be\nreasonably expected to have a material adverse effect on the business of HEC\nand any of its subsidiaries taken as a whole; and, to HEC's knowledge, no such\nproceedings are threatened by any governmental authority or by any other\nperson.\n\n                 (j)      Each of HEC and its subsidiaries is in material\ncompliance with all statutes, laws, ordinances, governmental rules or\nregulations or any judgment, order or decree to which it is subject and\npossesses such certificates, authorizations and permits issued by the\nappropriate regulatory agencies or bodies necessary to conduct the business now\noperated by it, except for such violations which, and except for such\ncertificates, authorizations and permits which if not possessed, would not be\nreasonably expected to have a material adverse effect on the business of HEC\nand its subsidiaries taken as a whole; and neither HEC nor any such subsidiary\nhas received any notice of proceedings related to any such violation or the\nrevocation or modification of any of the same which, individually or in the\naggregate, if the subject of any unfavorable decision, ruling or finding, would\nbe reasonably expected to have a material adverse effect on the business of HEC\nand its subsidiaries taken as a whole.\n\n                 (k)      Except (i) as and to the extent disclosed or reserved\nagainst in the Financial Statements, or (ii) for liabilities and obligations\nincurred after March 31, 1996, that would not be reasonably expected to have a\nmaterial adverse effect on the business of HEC and any of its subsidiaries\ntaken as a whole, neither HEC nor any of its subsidiaries has any liabilities\nor obligations of any nature, whether due or to become due, including, without\nlimitation, liabilities or obligations on account of taxes or other\ngovernmental charges or penalties, interest or funds thereon or in respect\nthereof and HEC does not know of any basis for any assertion against HEC or any\nof its subsidiaries of any debt, liability or obligation in any amount not\nreflected or reserved against in the Financial Statements which would be\nrequired to be set forth therein in accordance with generally accepted\naccounting principles.\n\n                 (l)      Except as disclosed in HEC's Annual Report on Form\n10-K\/A for the year ended December 31, 1995 or HEC's Quarterly Report on Form\n10-Q for the quarter ended March 31, 1996, (i) neither HEC nor any of its\nsubsidiaries has received any written complaint, or notice of violation,\nalleged violation, investigation, advisory action, potential liability or\npotential responsibility, regarding environmental protection matters or permit\n\n\n\n\n\n                                       9\n\ncompliance with regard to any of its or their properties, nor does HEC have\nknowledge that any governmental authority or third party is contemplating\ndelivering to HEC or any of its subsidiaries any such notice, (ii) there are no\ngovernmental, administrative or judicial actions or proceedings pending under\nany Environmental Laws to which HEC or any of its subsidiaries is or, to HEC's\nknowledge, is likely to be named as a party with respect to any of its or their\nproperties, nor are there any consent decrees, other decrees, consent orders,\nadministrative orders or other orders, or other administrative or judicial\nrequirements, outstanding under any Environmental Law with respect to any of\nsuch properties, and (iii) neither HEC nor any of its subsidiaries is an owner\nor operator of any facility or operation which is in violation of any\nEnvironmental Law or at which there has been or exists a release or threatened\nrelease of Hazardous Materials to the environment.  The terms 'Environmental\nLaws' and 'Hazardous Materials' shall have the meanings given to such terms in\nthe Original Agreement.\n\n                 (m)      HEC and each of its subsidiaries has caused to be\nduly filed in a timely manner, including any applicable extensions, with the\nappropriate governmental authorities all returns, statements and reports with\nrespect to any taxes that are required to be filed by or with respect to it.\nExcept for tax liens securing the payment of taxes not yet due and payable,\nthere are no tax liens upon any assets of HEC or any of its subsidiaries and no\nclaim for assessment or collection of any material taxes has been asserted\nagainst HEC or any of its subsidiaries, except for claims being challenged by\nHEC in good faith which are listed in Schedule 4.3(m) to this Agreement.\n\n                 (n)      Each Material Contract is valid and binding on the\nparties thereto and in full force and effect and neither HEC nor any of its\nsubsidiaries is in breach of a Material Contract, which breach would reasonably\nbe expected to have a material adverse effect on HEC or any of its\nsubsidiaries.  To HEC's knowledge, no other party to any Material Contract is\nin material breach thereof.  For the purposes of this Section, Material\nContract shall mean:  (i) all contracts requiring payment, or being reasonably\nlikely to result in payment, by any party thereto of more than $50,000.00\nannually; (ii) all material contracts with any governmental authority; (iii)\nall contracts not made in the ordinary course of business, which are material\nto HEC or any of its subsidiaries; and (iv) all contracts relating to\nindebtedness of HEC or any of its subsidiaries of a principal amount in excess\nof $250,000.00.\n\n                 (o)      None of HEC's statements or representations in this\nExchange Agreement contains any untrue statement of any material fact or omits\nto state any material fact necessary to be stated in order to make the\nstatements or representations made not misleading.\n\n\n\n\n\n                                       10\n\n                 (p)      HEC is the legal owner and holder of the HEC Mortgage\nand the Note (as defined in the HEC Mortgage) and of all rights arising under\nthe HEC Mortgage or such Note.\n\n                 (q)      As of the date of this Exchange Agreement, HEC in not\nin material breach of, or default under, the Original Agreement or any other\nagreement or instrument described in the Original Agreement or executed in\nconnection with the Original Agreement.\n\n         5.      TERMINATION.\n\n                 (a)      This Exchange Agreement and the transactions\ncontemplated by his Exchange Agreement may be terminated in the following\nsituations:\n\n                          (i)     by Momentum if (x) the conditions to its\nperformance described in Section 1(b) are not satisfied within 15 business days\nfrom the execution of this Exchange Agreement, or (y) any of HEX's or HEC's\nrepresentations are untrue in any material respect; or\n\n                          (ii)    by HEX or HEC if (x) the conditions to its\nperformance described in Section 1(b) are not satisfied within 15 business days\nfrom the execution of this Exchange Agreement, or (y) any of Momentum's\nrepresentations are untrue in any material respect.\n\n                 (b)      Except as provided in this Section 5(b), if this\nAgreement is terminated, neither party shall have any liability to any other\nparty arising under this Exchange Agreement.  Following termination of this\nExchange Agreement, the Original Agreement shall govern the rights and\nobligations of the parties.  If any party breaches this Exchange Agreement, or\nwillfully fails to fulfill a condition to any other party's performance,\nnothing in this Exchange Agreement shall be construed as limiting a\nnon-breaching party's legal or equitable rights and remedies arising under this\nExchange Agreement.\n\n         6.      AMENDMENT TO ORIGINAL AGREEMENT.  The Original Agreement is\nhereby amended by deleting Section 7.13 thereof in its entirety.\n\n         7.      NOTICES.  All notices required or permitted under this\nExchange Agreement shall be effective upon receipt if personally delivered, if\nmailed by registered or certified mail, postage prepaid, or if delivered by\ntelegram, fax or telecopy if directed to the parties as follows:\n\n                 To Momentum:\n\n\n\n\n\n                                       11\n\n                 Momentum Operating Co., Inc.\n                 232 South Main\n                 P.O. Box 578\n                 Albany, Texas  76430\n                 Attn:  Michael J. Parsons, President\n\n\n                 To HEX or HEC:\n\n                 Harken Exploration HEC\n                 Harken Energy Corporation\n                 5605 N. MacArthur Blvd., Suite 400\n                 Irving, Texas  75038\n                 Attn:  Richard H. Schroeder, President\n                 Copy to: Gregory S. Porter, Vice President - Legal\n\nAny party may give written notice of a change in the address or individual to\nwhich delivery shall be made.\n\n         8.      EXPENSES.  Except as otherwise provided in this Exchange\nAgreement, all fees, costs and expenses incurred by the parties in negotiating\nthis Exchange Agreement and in consummating the transactions contemplated by\nthis Exchange Agreement shall be paid by the party which incurred them.\n\n         9.      AMENDMENT.  The provisions of this Exchange Agreement may be\naltered, amended or waived only by a written agreement executed by the party to\nbe charged.  No waiver of any provision of this Exchange Agreement shall be\nconstrued as a continuing waiver of the provision.\n\n         10.     ASSIGNMENT.  Neither HEX nor HEC may assign all or any portion\nof its rights or delegate all or any portion of its duties under this Exchange\nAgreement without Momentum's prior written consent.  To the extent permitted by\nlaw, Momentum shall have the right to assign all or any portion of its rights\nunder this Exchange Agreement to any Momentum affiliate at any time.  Momentum\naffiliate shall have the same meaning given the term of 'Seller affiliate' in\nthe Original Agreement.\n\n         11.     HEADINGS.  The headings are for convenience only and do not\nlimit or otherwise affect the provisions of this Exchange Agreement.\n\n\n\n\n\n                                       12\n\n         12.     COUNTERPARTS.  This Exchange Agreement may be executed in\ncounterparts, each of which shall be an original and which, taken together,\nshall constitute the same  agreement.\n\n         13.     REFERENCES.  References, including use of a pronoun, shall\ninclude, where applicable, masculine, feminine, singular or plural individuals\nor legal entities.\n\n         14.     GOVERNING LAW.  This Exchange Agreement and the transactions\ncontemplated by this agreement shall be governed and construed under the laws\nof the State of Texas without giving effect to any rules of law which might\nrequire application of the law of another jurisdiction.  Venue of any action\narising under this Exchange Agreement shall be in Abilene, Texas.\n\n         15.     ANNOUNCEMENTS.  Except as otherwise required by law or\napplicable regulation, neither Momentum, HEX nor HEC shall announce or\notherwise publicize this Exchange Agreement or the transactions contemplated by\nthis Exchange Agreement without the prior written consent of the other party.\n\n         16.     ENTIRE EXCHANGE AGREEMENT.  This Exchange Agreement is the\nentire understanding between Momentum, HEX and HEC concerning the subject\nmatter of this Exchange Agreement.  This Exchange Agreement supersedes all\nnegotiations, discussions, representations, prior agreements and\nunderstandings, whether oral or written, including, without limitation, all\nletters or expressions of intent between the parties, concerning the subject\nmatter of this Exchange Agreement.  Except as expressly amended by the\nSupplemental Deed of Trust, or the Registration Rights Agreement, the Original\nAgreement and all agreements and instrument executed in connection with the\nOriginal Agreement remain unaffected by this Exchange Agreement.\n\n         17.     PARTIES IN INTEREST.  This Exchange Agreement is binding upon\nand shall inure to the benefit of Momentum, HEX and HEC and, except where\nprohibited, their successors, representatives and assigns.  Unless expressly\nstated to the contrary, no other person is intended to have any benefits,\nrights or remedies under this Exchange Agreement.\n\n         18.     SCHEDULES AND EXHIBITS.  All schedules and exhibits attached\nto this Exchange Agreement are incorporated into this Exchange Agreement for\nall purposes.  Reference to the 'Exchange Agreement' includes all agreements\nand instruments attached as schedules or exhibits to this Exchange Agreement or\nexecuted in connection with the transactions contemplated by this Exchange\nAgreement.\n\n\n\n\n\n                                       13\n\n         19.     SEVERANCE.  If any provision of this Exchange Agreement is\nfound to be illegal or unenforceable, the other terms of this Exchange\nAgreement shall remain in effect and this Exchange Agreement shall be construed\nas if the illegal or unenforceable provision had not been included.\n\n         20.     TIME.  Time is of the essence of this Exchange Agreement.\n\n\n\n\n\n                                       14\n\n         IN WITNESS WHEREOF, the parties hereto have executed this Exchange\nAgreement on the 11th day of July, 1996.\n\n\n                                        MOMENTUM OPERATING CO., INC.\n\n\n\n                                        By:       \/s\/ Michael J. Parsons        \n                                              ----------------------------------\n                                        Name:         Michael J. Parsons        \n                                              ----------------------------------\n                                        Title:        President                 \n                                              ----------------------------------\n                                                                                \n                                                                                \n                                                                                \n                                        HARKEN EXPLORATION COMPANY              \n                                                                                \n                                                                                \n                                                                                \n                                        By:       \/s\/ Gregory S. Porter         \n                                              ----------------------------------\n                                        Name:         Gregory S. Porter         \n                                              ----------------------------------\n                                        Title:        Vice President - Legal    \n                                              ----------------------------------\n                                                                                \n                                                                                \n                                        HARKEN ENERGY CORPORATION               \n                                                                                \n                                                                                \n                                                                                \n                                        By:       \/s\/ Gregory S. Porter         \n                                              ----------------------------------\n                                        Name:         Gregory S. Porter         \n                                              ----------------------------------\n                                        Title:        Vice President - Legal    \n                                              ----------------------------------\n                                        \n                                        \n                                        \n                                        \n\n                                       15\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":[9622,9625],"class_list":["post-43402","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-harken-oil---gas-inc","corporate_contracts_industries-energy__exploration","corporate_contracts_types-planning","corporate_contracts_types-planning__exchange"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43402","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=43402"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43402"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43402"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}